* Miners, oils rally with firmer commodity prices
* Banks gain on first anniversary of Lehman Bros collapse
* U.S. retail sales numbers awaited; UK inflation ignored
By Jon Hopkins
LONDON, Sept 15 (Reuters) - Britain's top share index was
0.2 percent higher at midday on Tuesday, lifted by a rally from
miners and banks, with vague bid rumours, broker comment and the
wait for U.S. retail sales data providing a focus.
By 1117 GMT the FTSE 100 <> was 10.32 points higher at
5,029.17, ahead for a third straight session.
"(Monday's) rally towards the close from trading lows is
enough to breed confidence that there is not an immediate will
for prices to fall, but equities are struggling at the moment to
find reasons to push on from these levels," said Josh Raymond,
Market Strategist at City Index.
Miners were the biggest driver for the market's gain as
metal prices rebounded from the previous session's lows.
Fresnillo <FRES.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L>, BHP
Billiton <BLT.L> and Kazakhmys <KAZ.L> added 0.3-2.6 percent.
Banks were mostly higher with Royal Bank of Scotland
<RBS.L>, Lloyds Banking Group <LLOY.L>, and HSBC up 0.3 to 2.5
percent, although Barclays <BARC.L> slipped 0.1 percent and
Standard Chartered <STAN.L> also fell 0.1 percent as investors
mulled comments from Bank of England Governor Mervyn King.
British interest rate futures rallied and sterling fell
after King said the central bank was looking at reducing the
remuneration rate on commercial bank reserves.
Such an option, first discussed at the BoE's August press
conference, would provide a disincentive for banks to hoard cash
with the central bank, encouraging them to lend to the private
sector.
Oil majors were mostly higher as crude prices <CLc1> moved
moved $69 a barrel.
BP <BP.L> was off 0.5 percent, but Royal Dutch Shell
<RDSa.L> moved 0.3 percent higher, and BG Group <BG.L> added 1.6
percent after unveiling another discovery in the Santos Basin
concession, offshore Brazil. []
Oil and gas explorer Tullow Oil <TLW.L>, up 3.4 percent also
got an additional boost from bid speculation, with market
chatter mentioning Italian ENI <ENI.MI> as a possible predator.
Neither company commented on the rumour.
Vague takeover talk also fuelled gains in International
Power <IPR.L>, up 5.6 percent, with the stock highlighted as a
possible bid candidate on Monday, while Man Group <EMG.L> firmed
3.3 percent on rehashed bid rumours.
BROKER COMMENT EYED
BT Group <BT.L> was up 3.5 percent, buoyed by a Credit
Suisse upgrade to 'outperform' from 'neutral', while precious
metals and chemicals firm Johnson Matthey <JMAT.L> gained 3.4
percent following a Goldman Sachs upgrade.
Rexam <REX.L> was the top blue-chip faller, down 3.3 percent
after Credit Suisse removed the stock from its Focus List, and
technology firm Smiths Group <SMIN.L> shed 1.7 percent after
Morgan Stanley cut its rating to 'equal-weight'.
U.S. blue-chip futures <DJc2> pointed to a weaker start on
Wall Street as investors awaited U.S. PPI and retail sales data
for further evidence of a recovery across the Atlantic.
"If we see an upsurge in U.S. retail sales we could see
investors return to the markets quickly and positively," said
Raymond.
Investors showed little reaction to news British consumer
price inflation rose 0.4 percent in August to give an annual
reading of 1.6 percent. the lowest since January 2005 but above
expectations for a sharper easing to 1.4 percent from 1.8
percent in July. []
Other data, released overnight, showed house prices in
England and Wales on a rising track for the first time in more
than two years, as measured by the Royal Institution of
Chartered Surveyors. []
The FTSE 100 index is up 45 percent since touching its March
lows, and closed at a near-one-year high on Monday at 5,018.85.
However, the FTSE is still 7.3 percent below the level it was
before the collapse of Lehman Brothers a year ago.
(Editing by Dan Lalor)
