* FTSE 100 up 0.9 percent
* Miners rebound; commodities rally, euro zone fears ebb
* UK inflation above expectations
By David Brett
LONDON, May 18 (Reuters) - Britain's top share index rose in
midsession trade on Tuesday, led by rebounding miners tracking
firmer commodity prices, and rallying banks as sovereign debt
concerns were squeezed aside.
By 1037 GMT the FTSE 100 <> was up 49.59 points, or 0.9
percent higher, at 5,312.13, after falling marginally on Monday.
"Alternate asset classes remain unattractive, investors and
market makers seem hell-bent in taking the market forward,"
David Buik, senior partner at BGC Partners, said.
Banks, a measure of the market's enthusiasm for risk, were
big gainers and bounced back from the previous two-sessions'
falls.
Barclays <BARC.L>, HSBC <HSBA.L>, Royal Bank of Scotland
<RBS.L> and Lloyds Banking Group <LLOY.L> rose 0.7-2 percent.
Confidence was helped as euro zone finance ministers met in
Brussels for talks aimed at ironing out wrinkles in the 750
billion euro ($1,006 billion) rescue plan hatched a week ago.
[]
Spurred by improved sentiment investors picked up
commodity-linked stocks on the cheap, helped by firmer commodity
prices which recovered from steep falls on Monday.
Miners Rio Tinto <RIO.L>, Xstrata <XTA.L>, Kazakhmys <KAZ.L>
and BHP Billiton <BLT.L> gained 2.3-3 percent.
The sector <.FTNMX1770> has been hit by potential China
monetary tightening and euro zone debt issues and is 18 percent
off 2010 highs hit in late March.
Randgold <RRS.L>, which has risen recently along with the
gold price <XAU=>, fell 1.2 percent as investors banked profits.
Energy firms BG Group <BG.L>, Royal Dutch Shell <RDSa.L> and
BG Group <BG.L> rose 0.6-1.1 percent.
MIXED INFLATION
British consumer price inflation unexpectedly jumped to a
17-month high in April. Continuing spikes in inflation could see
an earlier than expected rise in interest rates, which in turn
could stifle economic recovery.
The Bank of England will have to write a public letter to
the new Conservative finance minister, George Osborne,
explaining why inflation is still more than a percentage point
above Britain's official 2 percent target. []
"It does feel that the market is taking a relaxed view on UK
inflation at the moment, on the assumption that it is going to
drop, but there are no signs of this happening yet," Will
Hedden, sales trader at IG Index said.
Euro zone consumer prices rose 1.4 percent year-on-year in
March, though the overall gain fell short of market expectations
and price growth is seen subdued this year. []
Among other individual movers, hedge-fund firm Man Group
<EMG.L> was the top riser, up 5.2 percent recovering some of the
deep losses sustained on Monday after it announced it had agreed
to buy rival GLG Partners <GLG.N>.
ICAP <IAP.L> rose 5 percent as Panmure Gordon upgraded its
recommendation and estimates on the world's biggest inter-dealer
broker ahead of full-year results due on Wednesday.
British Land <BLND.L> climbed 2.9 percent after the property
company posted its first full-year mark-up in its portfolio
since the UK property bubble burst three years ago.
British Airways <BAY.L> gained 0.8 percent after the airline
won a legal bid on Monday to block a threatened five-day strike
by cabin crew members, which had been due to start on Tuesday.
On the downside, Prudential <PRU.L>, which unveiled a record
$21 billion cash call on Monday, topped the faller list down 1.4
percent.
($1=.7453 Euro)
