* U.S. mortgage plan eases investor jitters
* Energy stocks up as crude steadies
* Banks gain; LSE rises on new CEO
By Simon Falush
LONDON, 13 Feb (Reuters) - Britain's top share index gained
1.1 percent by midday on Friday as hopes for a U.S. plan to
subsidise mortgage payments eased investor anxiety about banks,
while energy stocks rose on an improved demand outlook.
By 1136 GMT, the FTSE 100 <> had gained 44.93 points to
4,247.17 after falling 0.8 percent the previous session but the
index is still down 4.3 percent on the year having slipped 31
percent in 2008.
The Obama administration is hammering out a programme to
subsidise U.S. mortgages in a new front to fight the credit
crisis, sources familiar with the plan told Reuters on Thursday,
boosting financial markets.
Banks were strong gainers. Barclays <BARC.L>, HSBC <HSBA.L>
and Royal Bank of Scotland <RBS.L> added between 3.3 percent and
5.8 percent.
However, analysts were sceptical about whether the plan
would have a lasting impact on overall sentiment and said that
the dour economic mood would keep equities pressured for some
time to come.
"There is support for the FTSE above 4,000, particularly
from private clients, but there's an element of doubt about
whether investors are correctly anticipating the extent of the
recession," said Tim Whitehead, a stockbroker at
Redmayne-Bentley in Leeds.
In a major break from existing aid programmes, the plan
under consideration would seek to help homeowners before they
fall into arrears on their loans. Current programmes only assist
borrowers that are already delinquent. []
Democratic leaders in the U.S. Senate and House of
Representatives on Thursday wrapped up last minute tax-cut and
spending details in the $789 billion economic stimulus bill,
setting final votes for Friday in both chambers. []
Congressional negotiators have agreed on a final "Buy
American" provision as part of the economic stimulus bill that
requires public works projects funded by the plan to use only
U.S.-made goods, including iron and steel, a lobbyist said on
Thursday. []
"(Investors) will take comfort from the fact it appears to
be a multi-pronged attack trying to stabilise the economy in the
United States and that has ramifications for the global economy,
and that helps cyclical stocks, like miners," Potts said.
COMMODITIES RESILIENT
Commodities stocks were stronger with energy companies
supported as crude prices recovered slightly, snapping a
five-day losing streak <CLc1>.
Oil giants Royal Dutch Shell <RDSa.L> and BP <BP.L> added
0.6 and 0.5 percent respectively while BG Group <BG.L> added 1.3
percent.
Similarly, mining stocks gained as metal prices edged
higher.
BHP Billiton <BLT.L> added 2.1 percent and Xstrata <XTA.L>
gained 4.4 percent but Rio Tinto <RIO.L> underperformed the
sector, up 0.7 percent after Chinalco president Xiao Yaqing said
on Friday the company had no plans to increase its minority
stake in the miner. []
The London Stock Exchange <LSE.L> rose 5.7 percent after it
was announced that Xavier Rolet, an equities trading veteran who
ran Lehman Brothers in France, has been appointed as the
bourse's new chief executive. []
Home improvement retail group Kingfisher <KGF.L> added 5.9
percent to top the list of large-cap risers after UBS raised it
to "buy" from "neutral" and upped its price target.This helped
peer Home Retail <HOME.L>, which added 6.8 percent.
UBS said that although there was no evidence yet that demand
was improving, the capacity situation in both the retail and
trade markets and a better outlook on costs, suggested profit
forecasts for Kingfisher's B&Q unit may be on the turn.
Investors will watch a meeting of the Group of Seven (G7)
finance ministers at the weekend in Rome as protectionist
worries and dire figures from a shrinking euro zone economy set
a gloomy tone. []
(Reporting by Simon Falush; editing by Karen Foster)
