* FTSE 100 0.1 pct weaker, above lows
* US stock futures up on hopes bailout plan rejection will
be reversed
* Financials mixed; HBOS drops on deal repricing rumours
* Miners gain on firmer gold price
(For a TAKE A LOOK on the financial crisis, click on
[])
By Jon Hopkins
LONDON, Sept 30 (Reuters) - Britain's leading share index
was 0.1 percent lower at midday on Tuesday, recovering from a
hefty opening slide amid hopes that U.S. lawmakers rejection of
a crucial $700 billion financial rescue plan could be reversed.
At 1110 GMT, the FTSE 100 <> was 7.5 lower points at
4,811.3, below an earlier peak but well off the session low of
4,671.0 -- its lowest level since November 2004.
The UK benchmark plunged 5.3 percent on Monday, and has
fallen 14.5 percent this month, on track for its biggest monthly
decline since October 1987 when it tumbled 26 percent.
End-quarter position-squaring was expected to come into play by
the close, traders said.
"While we may not be thundering higher in Europe, we are not
seeing the huge losses that were predicted. This is a boost for
confidence and has led to some short covering and bargain
hunting," said Tom Hougard, chief market strategist at City
Index.
U.S. stock index futures <DJc1> <SPc1> rose strongly on
Tuesday, pointing to a tentative recovery from Monday when the
Dow Jones industrial average <> recorded its largest-ever
single-day point decline.
"It's certainly my working assumption that there is some
sort of agreement reached in the U.S. and based on that I would
expect the market to recover quite strongly from yesterday's
sell-off," said Darren Winder, equity strategist at Cazenove.
"It's a softish day. But equities are now getting to extreme
valuations where fundamentally there is an awful lot of value."
Banks were mixed at midday, although the FTSE 350 banks
index <.FTNMX8350> was still 1.3 percent weaker, but above
earlier lows.
HBOS <HBOS.L> was the worst performer, down 16.3 percent
amid talk the terms of the bank's rescue takeover by Lloyds TSB
<LLOY.L> might be amended due to share price movements.
Both HBOS and Lloyds declined to comment. Lloyds shares
gained 3.8 percent.
Standard Chartered <STAN.L> and HSBC <HSBA.L> shares added
6.0 percent and 0.9 respectively.
Other financials also managed to rally amid some
bargain-hunting, with inter-dealer broker ICAP <IAP.L>
recovering 10.7 percent after a big slide on Monday following a
trading update, while Old Mutual <OML.L> added 5.4 percent and
insurer Prudential <PRU.L> took on 4.3 percent.
Miners offered some support on higher gold prices <XAU=> as
investors sought safer assets.
BHP Billiton <BLT.L>, Rio Tinto <RIO.L>, Anglo American
<AAL.L>, Xstrata <XTA.L> and Eurasian Natural Resources <ENRC.L>
put on between 1 and 7.1 percent.
In the broader market, Tesco <TSCO.L> advanced 3.3 percent
after Britain's biggest retailer met forecasts with a 10.3
percent rise in first-half profit and said like-for-like sales
growth at its UK operations accelerated over the summer months.
PUBS UP
Among mid-caps, Enterprise Inns <ETI.L> jumped 13 percent as
the pubs operator delivered an in-line trading update provided
some reassurance in a troubled sector.
The group also said it has put on hold plans to convert into
a low-tax Real Estate Investment Trust (REIT) because of the
current turmoil in the financial markets.
Enterprise Inns' peers rallied as well, with Punch Taverns
<PUB.L> up 13 percent, Mitchells & Butlers <MAB.L> ahead 7.4
percent and JD Wetherspoon <JDW.L> up 5 percent.
There was little reaction to news the British economy stood
still in the second quarter of 2008 and the current account gap
widened to its highest level in nearly a year, according to
official data on Tuesday.
