* FTSE 100 up 0.5 pct
* Commodities lead the upside to track higher oil prices
* Vodafone weighs
By Michael Taylor
LONDON, Aug 29 (Reuters) - Britain's leading share index was
up 0.5 percent by midday on Friday as commodity companies
boosted by higher energy prices supported, while heavyweight
Vodafone <VOD.L> dragged.
At 1018 GMT the FTSE 100 <> was up 27.4 points at
5,628.6 after closing at a two-month high in the previous
session.
Oil and metal stocks tracked higher U.S. crude prices
<CLc1>, at almost $117 a barrel as oil companies prepared for
Tropical Storm Gustav to deliver what could be the hardest hit
to the heart of U.S. offshore production since the devastating
2005 hurricane season.
BP <BP.L> tacked on 1.2 percent, gas producer BG Group
<BG.L> added 1.4 percent and Cairn Energy <CNE.L> was up 2.6
percent.
British oil and gas services firm Petrofac <PFC.L> topped
the FTSE 100 gainers list with a rise of 5.2 percent. The
company said it has bought production technology firm Caltec Ltd
for a maximum 30 million pounds ($54.85 million).
Miners were the top sectoral gainer, however, accounting for
over 11 positive index points, with BHP Billiton <BLT.L>, Anglo
American <AAL.L> and Rio Tinto <RIO.L> rising between 1.5 and 2
percent.
On the downside, heavyweight Vodafone <VOD.L> lost 1.7
percent after negative broker comment on Thursday and as
jointly-owned South African mobile operator Vodacom agreed to
buy most of African network and satellite services firm Gateway
for $700 million including debt. []
Shares in Enterprise Inns <ETI.L> shed 3.8 percent, hit by
an investment rating downgrade by Landsbanki to "reduce" from
"hold" and an initiation as "underperform" by Credit Suisse in
two negative reviews of the UK pubs sector.
"The outlook for economic growth and corporate profits is
far from great and any fundamental improvement will take time
given the excesses that have built up over the last few years,"
said Nick Batsford, an analyst at Hobart Capital Markets.
"I have no idea whether or not we've hit rock bottom. (But)
the bulls are still tentatively on the field, they have the ball
and therefore I must run with the strongest plays."
"I will look for stocks with bullish chart patterns, in
bullish sectors along with bullish fundamentals," he added.
UK banking shares were steady, as investors' optimism about
a recovery in the global economy got a lift following the
release of U.S. economic data on Thursday.
The figures showed the U.S. economy grew at a surprisingly
robust 3.3 percent in the second quarter, helped by strong
export growth and consumer spending.
Investors on Friday were awaiting U.S. PCE price index data
at 1230 GMT and Chicago PMI figures at 1345 GMT for near-term
market direction.
Royal Bank of Scotland <RBS.L>, Barclays <BARC.L>, HBOS
<HBOS.L> and HSBC <HSBA.L> gained between 0.4 and 3 percent.
But troubled UK lender Bradford & Bingley <BB.L> sank 1.5
percent after it fell to a first-half loss, hit by 155 million
pounds in writedowns and investment losses, and said bad debts
had risen by more than half since the end of 2007.
[]
"Are the markets going to settle down any time soon and is
liquidity going to improve? The answer to both of the questions
is probably 'no'. Is the situation going to get any worse? The
answer to that is probably 'no' as well," said Neil Parker,
market strategist at Royal Bank of Scotland.
"I am reasonably bullish about the market as we are heading
into the fourth quarter. I think we are going to see some
improvement in the numbers."
(Additional reporting by Atul Prakash; Editing by Greg Mahlich)
