* FTSE 100 up 4.2 percent as global stocks recover
* Strong results from Aviva, BP lift sentiment
* Firmer commodity prices lift energy, miners
(For more on the financial crisis, please click on [])
By Amanda Cooper
LONDON, Oct 28 (Reuters) - Britain's top blue-chip shares
had rallied by midday on Tuesday, after a flurry of positive
corporate results.
A rebound in the price of crude oil <CLc1> and
forecast-beating results from BP <BP.L> helped boost the energy
sector, while an upbeat trading statement from Asia-focussed
bank Standard Chartered <STAN.L> lifted the financial sector.
By 1203 GMT the FTSE 100 <> was up 162.20 points at
4,014.63 after closing down 0.8 percent on Monday.
But the index is still on track for a near-18 percent
decline in October as growing fears of a recession in Britain
and the firestorm in the global financial system have terrified
investors.
"It's a bit of a nicer day today. That goes without saying,"
said Philip Lawlor, chief portfolio strategist at Nomura
Securities.
"It's been a torrid period. I think all eyes are on monetary
policy going forward ... to get a more meaningful bounce here
(in stocks) we've got to have this sign that central bankers are
going to be, by Christmas, targeting another two to three
interest rate cuts," he said.
The Bank of England has cut rates twice this year and is
widely expected to cut rates by another 50 basis points to 4
percent next week.
LATE ASIA BOUNCE
The more robust tone in the FTSE 100, which is hovering
around its lowest level in five years, was set by a late jump in
Asian shares, which recovered somewhat from Monday's hefty
losses.
Leading the move higher was heavyweight BP, which rose 8.4
percent after beating all forecasts and reporting a 148 percent
rise in third-quarter replacement cost profits compared with the
same period in 2007, to a record $10.0 billion thanks to higher
oil prices. []
Other gainers in the energy sector included Cairn Energy
<CNE.L>, which rose 2.5 percent, Royal Dutch Shell <RDSa.L> and
BG Group <BG.L>, which both rose 6.7 percent.
"All the important numbers have been strong this morning, BP
released belting results and Aviva's <AV.L> results were
reassuring," said Jim Wood-Smith, head of research at Williams
de Broe in Exeter.
"The news has been so unrelentingly miserable over the last
few weeks that there's every chance of a random bounce, and this
looks like it."
British life insurer Aviva reported a better than expected
12 percent rise in its nine-month sales, and confirmed that it
may renegotiate a 1 billion-pound payout to policyholders as a
result of weak financial markets. It rose 13.5 percent.
Fuelling the recovery in the banking sector was the BoE's
twice-yearly Financial Stability report which said global
intervention should steady the financial system but will also
put big constraints on banks. []
HSBC <HSBA.L>, Royal Bank of Scotland <RBS.L> and HBOS
<HBOS.L> added between 2.6 percent and 6.2 percent.
Miners also snapped a heavy losing streak as metal prices
recovered ground after steep falls.
BHP Billiton <BLT.L> and Rio Tinto <RIO.L> rose 7.6 percent.
The Federal Reserve begins a two-day meeting ahead of a
decision on interest rates at which it is expected to cut
interest rates by 50 basis points <FEDWATCH>.
Speculation about the outlook for global monetary policy
also heightened after European Central Bank President
Jean-Claude Trichet said on Monday the ECB could cut rates at
its November meeting. []
(Additional reporting by Simon Falush; Editing by Greg Mahlich)
