* BP fuels rally in energy stocks after results
* Drug issues higher ahead of numbers
* RBS big faller; ING fate causes jitters
By Tricia Wright
LONDON, Oct 27 (Reuters) - Britain's top share index was up
by midday on Tuesday as forecast-beating results from oil giant
BP <BP.L> fuelled a rally among energy stocks, offsetting a weak
banking sector.
By 1155 GMT, the FTSE 100 <> was up 30.71 points, or
0.6 percent at 5,222.53, after closing down 1 percent on Monday.
The index has surged about 51 percent from a six-year low in
March, though is still 3.7 percent below its level in
mid-September 2008, before the collapse of Lehman Brothers.
"These are markets that are not necessarily to be trusted,"
said Howard Wheeldon, strategist at BGC Partners. "There is a
degree of uncertainty out there, but nothing this morning has
yet so far upset the apple cart."
Energy stocks added most the points to the index, led by BP,
up 4.2 percent after it reported a halving of third-quarter
profits but beat forecasts by a wide margin. []
BP's news had a positive knock-on effect on its peers, with
BG Group <BG.L> adding 1.4 percent ahead of its third quarter
results on Wednesday, while Royal Dutch Shell <RDSa.L> firmed 1
percent, and Cairn Energy <CNE.L> was 0.5 percent higher.
Drugmakers were also in demand, ahead of third-quarter
numbers from the sector.
GlaxoSmithKline <GSK.L>, due to post results on Wednesday,
added 2.7 percent, after the company and Danish biotech firm
Genmab <GEN.CO> won U.S approval to sell a leukaemia drug.
[]
AstraZeneca <AZN.L>, scheduled to report its results on
Thursday, rose 1.2 percent, while Shire <SHP.L> climbed 1
percent.
Results anticipation also gave Reckitt Benckiser <RB.L> a
lift, with shares in the cleaning products group rising 1.6
percent before its third-quarter results due at 1200 GMT on
Tuesday.
A broker upgrade boosted Reed Elsevier <REL.L>, up 3.7
percent. Exane BNP Paribas lifting its rating for the
Anglo-Dutch publishing group to "outperform" from "underperform"
on valuation grounds.
RBS BIG FALLER
Banks were the biggest drag on the index, with Royal Bank of
Scotland <RBS.L> the top faller, off 2.8 percent.
Investors were unsettled after fears mounted on Monday that
Lloyds Banking Group <LLOY.L> and RBS would be ordered into
disposals by the European Commission after Dutch peer ING
<ING.AS> announced it would split into two units and launch a
7.5 billion euro rights issue.
Lloyds fell 2.4 percent, while Barclays <BARC.L>, HSBC
<HSBA.L> and Standard Chartered <STAN.L> shed 0.8 to 2.1
percent.
Heavyweight miners were weak as doubts about the demand
outlook resurfaced.
Rio Tinto <RIO.L>, Xstrata <XTA.L>, Anglo American <AAL.L>,
Kazakhmys <KAZ.L> and Fresnillo <FRES.L> lost 0.3 to 1.9
percent.
U.S. blue chips were expected to rally on Tuesday after
sharp falls in the previous session. U.S. economic data set for
release on Tuesday include the August figures for the
S&P/Case-Shiller index of house prices at 1300 GMT and U.S.
consumer confidence numbers for the same month at 1400 GMT.
The Bank of England's quantitative easing policy will not
cause a future surge in inflation, BoE policymaker Adam Posen
said on Monday. []
(Editing by Karen Foster)
