* Bank of America capital needs dent sentiment, banks robust
* Energy stocks fall
* Service sector, consumer confidence data beat forecasts
By Simon Falush
LONDON, May 6 (Reuters) - Britain's top share index added
0.3 percent by late morning on Wednesday as losses in energy
stocks were outweighed by gains in banks which shrugged off news
that Bank of America <BAC.N> needs $34 billion in fresh capital.
By 1017 GMT the FTSE 100 <> was up 13.58 points at
4,350.52 after closing 2.2 percent higher at 4,336.94 the
previous session. The index is down 2.1 percent on the year but
has rallied 25.8 percent since its trough on March 9.
Better-than-expected consumer confidence and service sector
data kept investor sentiment positive.
"There has been some solid economic data supporting the view
that the economy is pulling out of its nose-dive," said Peter
Dixon, economist at Commerzbank.
Bank of America has been deemed to need as much as $34
billion according to the results of a government stress tests, a
source familiar with the results told Reuters late on Tuesday.
UK Banks, which have surged by 121 percent since a trough in
March <.FTNMX8350>, were robust, however and were also supported
by strong results from BNP Paribas <BNPP.PA> which posted
first-quarter profits well above forecast.
HSBC <HSBA.L>, Royal Bank of Scotland <RBS.L> and Lloyds
Banking Group <LLOY.L> gained between 0.7 percent and 4.7
percent. Barclays <BARC.L>, however, dipped 2.4 percent.
Standard Chartered <STAN.L> added 7 percent, supported as
Exane BNP Paribas raised it to "neutral" from "underperform" and
continuing positive sentiment after it posted record first
quarter profits the previous session.
Activity in Britain's service sector shrank at its slowest
pace since last August, helped by a marked improvement in new
business and confidence in the outlook, the CIPS/Markit survey
showed. []
Energy stocks, which have enjoyed a strong rally in recent
days, retreated as risk appetite was crimped slightly by the
scale of Bank of America's funding needs, but losses were
muted.
BP <BP.L> fell 1.1 percent, Royal Dutch Shell <RDSa.L> lost
3.2 percent and BG Group <BG.L> retreated by 2.5 percent.
Shell's losses were exacerbated as it went ex-dividend.
CONFIDENCE GAINS
British consumer morale enjoyed its biggest monthly boost in
two years last month as people sensed the worst of the recession
may have passed, a survey showed.
The Nationwide Building Society's consumer confidence index
rose to 50 last month from 42 in March. The eight-point rise was
the most marked improvement in the index since May 2007 while
the level was the highest since December. []
And British shop price inflation slowed markedly in April as
food price inflation dropped for the first time this year, the
British Retail Consortium said. []
But in a sign that the economy is still ailing, house prices
fell a sharper than expected 1.7 percent in April, the Halifax
house price survey showed.
Defence contractor BAE Systems <BAES.L> fell 3.8 percent
despite trading in the first four months of 2009 meeting
expectations.
Nine companies including Kingfisher <KGF.L>, Antofagasta
<ANTO.L> and Whitbread <WTB.L> retreated after going
ex-dividend.
(Editing by Sharon Lindores)
