FTSE rises by midday on commodities; banks weigh

                                
 By Dominic Lau
                                
 LONDON, May 19 (Reuters) - Britain's top share index rose by
midday on Monday, extending the previous session's gains, as
commodity shares tracked firmer raw material prices, offsetting
weaker banks.
                                
 By 1051 GMT, the FTSE 100 <.FTSE> was up 15.7 points, or
0.25 percent at 6,320.0, after hitting its highest closing level
in four months on Friday. Major European indexes also traded
higher by mid-session.
                                
 "Investors are still pretty confident on the outlook of the
stock market as opposed to the negative headlines that we are
seeing at the moment," said Henk Potts, equity strategist at
Barclays Stockbrokers.
                                
 "There was a lot to be disappointed about from the macro
economy last week but increasingly investors are believing the
second half of the year looks brighter than the first half."
                                
 Miners were in demand, with BHP Billiton <BLT.L>, Rio Tinto
<RIO.L>, Anglo American <AAL.L>, Xstrata <XTA.L>, Vedanta
Resources <VED.L>, Lonmin <LMI.L> and Kazakhmys <KAZ.L> up
between 0.2 and 5.4 percent.
                                
 Kazakhmys, which topped the FTSE 100 gainers, was also
lifted by Credit Suisse's move to add the stock to its Europe
focus list, while Vedanta was boosted by a rating upgrade from
Citi.
                                
 Oil shares also gained as crude prices <CLc1> held near $126
a barrel. BP <BP.L> advanced 0.7 percent, Royal Dutch Shell
<RDSa.L> added 1.3 percent and gas producer BG Group <BG.L> put
on 1.9 percent.
                                
 Banks were the heaviest negative weight on the index,
despite comments from Deutsche Bank <DBKGn.DE> Chief Executive
Josef Ackermann that the end of the credit crisis was getting
closer and the U.S. real estate market should recover in the
second half of the year. [ID:nL18189630]
                                
 Royal Bank of Scotland <RBS.L>, Barclays <BARC.L>, HSBC
<HSBA.L>, HBOS <HBOS.L>, Lloyds TSB <LLOY.L>, Standard Chartered
<STAN.L> and Alliance & Leicester <ALLL.L> were all down between
0.2 and 6.3 percent.
                                
 BAE Systems <BAES.L> shed 1.3 percent after the company said
U.S. officials investigating alleged bribes in a Saudi arms deal
subpoenaed its chief executive Mike Turner and non-executive
director Nigel Rudd. [ID:nN18492328]
                                
 BSkyB <BSY.L> advanced 2.6 percent after Deutsche Bank
upgraded the pay-TV operator to "buy" from "hold".
                                
 The broker, on the other hand, downgraded British Airways
<BAY.L> to "sell" from "buy". The stocks was down 4.7 percent.
                                
 "There is a signal that the U.S. did not go into recession.
We are beginning to sense that earnings from the non-financial
sector were generally far better than expected," said Stephen
Pope, head of equity research at Cantor Fitzgerald.
                                
 "The fact we broke through the 6,227 level was very
encouraging and I imagine we are now going to press up, not in a
straight line, around the 6,420-6,450 level," Pope said, looking
at the FTSE 100 chart.
 (Additional reporting by Rebekah Curtis, editing by Elizabeth
Fullerton)