* FTSE up 0.3 percent, UK spending review due at 1130 GMT
* Miners rally, Rio expands Iron ore ops
* Energy share weak after crude slump
By David Brett
LONDON, Oct 20 (Reuters) - Britain's leading shares climbed
higher on Wednesday, with strength in miners and banks
outpacing weakness in energy stocks, as investors waited for the
British government's spending review.
By 1041 GMT, the FTSE 100 index <> was up 18.28 points,
or 0.3 percent, at 5,722.16, bouncing off a session low of
5,680.43 and having closed 0.7 percent lower at 5,703.89 on
Tuesday.
Miners <.FTNMX1770> strengthened, after having sustained
losses over the past three days and following a steep decline on
in the previous session when China surprised markets by
announcing its first interest rate rise since 2007, a move
designed to rein in a booming economy.
Global miner Rio Tinto <RIO.L> rose 1.8 percent after it
approved a $3.1 billion iron ore expansion to meet booming
demand from Asia, staking a claim to become the world's top
producer and defying industry concerns over a new Australian
mining tax. []
Banks turned around early losses in choppy trade as
investors took positions ahead of further earnings news from the
United States.
Barclays <BARC.L> rose 1.0 percent and Lloyds Banking Group
<LLOY.L> added 0.8 percent, with results from Morgan Stanley
<MS.N> set for 1130 GMT.
The banks have been helped by forecast-beating earnings from
BofA Merrill Lynch <BAC.N> and Goldman Sachs <GS.N> on Tuesday,
which backed up Citigroup's <C.N> numbers from Monday.
U.S. stock index futures pointed to a slight rebound on Wall
Street on Wednesday, ahead of Morgan Stanley's results.
The Bank of England's (BoE) Monetary Policy Committee split
three ways in October, according to meeting minutes released on
Wednesday. One committee member called for a resumption of
stimulus, another repeated his call for a rate hike and the
remaining seven voted for no change. []
"The split had been expected and the detailed minutes
suggests the BoE is leaning toward greater monetary easing
methods as opposed to tightening, which should boost demand for
equities," Jimmy Yates, head of equities at CMC Markets, said.
Elsewhere, Smith & Nephew <SN.L> gained 4.1 percent, the top
FTSE 100 <> riser, with traders citing a positive
read-across from results on Tuesday from the orthopaedic
products firm's U.S peers Stryker Corp <SYK.N> and Johnson &
Johnson <JNJ.N>.
ENERGY DRAIN
Energy stocks were the biggest drag on the index after crude
oil <CLc1> fell over 4 percent in the previous session,
following the interest rate rise in China.
Oil majors BG Group <BG.L> and BP <BP.L> shed 1.3 and 0.2
percent, respectively.
In the UK, investors will closely watch developments from
parliament, where the coalition government will unveil its
much-anticipated spending review, due at 1130 GMT, which aims to
cut public spending by 83 billion pounds by 2015.
Most government departments face cuts of about 25 percent
over four years.
Outsourcing company Serco Plc <SRP.L>, which relies heavily
on revenue from the UK government, dropped 1.8 percent.
Ex-dividend factors took off 1.86 points, with Smiths Group
<SMIN.L>, BSkyB <BSY.L> and BAE Systems <BAES.L> all losing
their payout attractions.
Smiths and BAE Systems have been hurt by the defence cuts
announced by the UK government on Tuesday. []
ARM Holdings <ARM.L> was 1.8 percent lower, extending the
previous session's losses after Apple <AAPL.O>, which uses ARM
chips, disappointed investors late on Monday with
weaker-than-expected gross margins and iPad shipments.
(Editing by Karen Foster)
