* FTSE up for third day, touches two-week high
* Banks firmer, L&G gains after results, Man up on bid talk
* Miners up, supported by metal price
* Rexam down; results disappoint
By Simon Falush
LONDON, Feb 17 (Reuters) - Britain's top share index was up
0.6 percent by midday on Wednesday as financials and miners
rose, bolstered by growing confidence on the global economic
outlook, while Man Group <EMG.L> jumped on M&A talk.
By 1148 GMT the FTSE 100 <> was up 30.14 points, at
5,274.20, touching a two-week high after it added 1.5 percent on
Tuesday.
But the index is still down 2.7 percent this year after a
sharp sell-off in January and investors remain cautious about
the outlook for equity markets.
"We have had positive economic data from the U.S. and
earnings have been good, with signs of top-line growth. But I am
not convinced we are at the start of a big uptrend, and overall
we would sell into rallies," said Ronan Carr, European equity
strategist at Morgan Stanley.
U.S. stocks posted their biggest daily percentage gain in
three months on Tuesday after strong revenue from drugmaker
Merck <MRK.N> and regional manufacturing data instilled
confidence in the economic outlook.
Man Group <EMG.L> was the top gainer, up 6.4 percent,
supported by market talk BlackRock <BLK.N> was interested in
taking a stake and as investors reacted positively to weekly
results of its AHL Diversified fund which showed a 0.15 percent
gain.
The blue-chip index pared gains after data showed the number
of Britons claiming unemployment benefit rose in January -- a
fall had been forecast -- and by the largest amount since July.
[]
But positive sentiment persisted with investors remaining
upbeat on banks after strong results from Barclays <BARC.L> on
Tuesday indicated the financial sector might be in better shape
than many had feared.
Adding to strong gains on Tuesday, Barclays gained 2.2
percent while HSBC <HSBA.L>, Standard Chartered <STAN.L>, Royal
Bank of Scotland <RBS.L> and Lloyds Banking Group <LLOY.L> added
1.2-2.0 percent.
Banks were also supported as French lender BNP Paribas
<BNPP.PA> beat forecasts with fourth-quarter results by taking
fewer bad debt provisions than expected.
Insurer Legal & General <LGEN.L> was 2.4 percent firmer
after it met expectations with a 7 percent drop in sales but
doubled British cash generation and said it expected a rebound
in its key home insurance market in 2010.
Miners also gained as metal prices firmed, supported as the
dollar stayed weaker after the euro held onto sharp gains made
the previous session <EUR=>. Eurasian Natural Resources
<ENRC.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L>, Lonmin <LMI.L>,
Anglo American <AAL.L>, Kazakhmys <KAZ.L> and BHP Billiton
<BLT.L> added 0.6-3.9 percent.
RETAIL CHEER
Retailers were also in demand, with Home Retail <HOME.L> up
3.2 percent after Investec upgraded its recommendation on
Britain's biggest household goods retailer to 'buy' from 'hold'
on valuation grounds, and raised its earnings forecasts.
Peer Kingfisher <KGF.L> gained 3.3 percent ahead of its
fourth-quarter trading update due on Thursday.
Aerospace group Cobham <COB.L> rose 2.6 percent, bolstered
by news it has won a contract to make components for new
helicopters to be used by the U.S. army.
Among a small list of fallers, Rexam <REX.L> was the top
laggard, down 3.2 percent with traders saying its full-year
pretax profit was disappointing, although the company forecast
an improved profit for 2010.
Later in the session, the U.S. import price index, due at
1330 GMT, and U.S. industrial production data for January, due
at 1415 GMT, will provide a focus.
BP <BP.L>, Carnival <CCL.L> and Scottish & Southern Energy
<SSE.L> went ex-dividend, knocking 7.18 points off the index.
(Editing by Dan Lalor)
