* FTSE 100 up 1.9 percent; bargain hunters prevail
* Prudential climbs on talk AIA deal is off
* BP leads energy stocks higher; defining day in oil spill
By David Brett
LONDON, May 27 (Reuters) - Britain's top shares rose in
midday trade on Thursday as investors continued to hunt bargains
after recent steep falls, with Prudential leading insurers
higher on talk its takeover of AIG's Asian arm may be abandoned.
By 1059 GMT, the FTSE 100 <> index was up 93.82 points,
or 1.9 percent at 5,131.90, adding to the previous session's 2
percent gain.
The blue chip index is still down 12 percent since mid-April
when fears about the euro zone debt crisis escalated.
"Stocks are being viewed on the cheap side and, while the
sentiment is there, the market will continue to rise," Jimmy
Yates, head of equities at CMC Market said.
"I can't see investors getting too far ahead of themselves
though given the uncertainty still lingering in the background."
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Graph on stock performance in 2010:
http://graphics.thomsonreuters.com/10/GLB_PRFE0510.html
Latest wrapup on the euro zone debt crisis: []
Graphic on the euro zone debt: http://link.reuters.com/fyw72j
Global investing blog
http://blogs.reuters.com/globalinvesting/
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Evidence that the UK recovery will not be plain sailing came
as British retail sales suffered an unexpected hit in May.
[]
Among the big gainers, Prudential <PRU.L>, Britain's largest
insurer, added 6 percent on market talk its $35.5 billion
takeover of U.S. giant AIG'S Asian business may be off.
Prudential said it would not comment on market rumour and
speculation.
The Times earlier reported that shareholders holding up to
15 percent of the British insurer's shares plan to write to the
chairman saying they oppose the takeover.
Prudential led the insurers higher, with the sector also
boosted by an upbeat note from Nomura on Aviva <AV.L> and Legal
& General <LGEN.L>.
The broker said it saw "remarkable value" for investors in
the two stocks on growing evidence that significant credit
provisions could constitute "hidden reserves" that might
materially boost earnings over the medium term.
Aviva and Legal & General rose 6.0 percent and 5.5 percent
respectively.
Elsewhere, BP <BP.L> led a rally by oil majors as it faces a
defining day in its five-week Gulf of Mexico oil spill disaster
when its latest attempt to seal a gushing well deep underwater
will be deemed either a success or a failure. []
BP has lost over 20 percent of its market value since news
of the spill broke.
Other energy stocks, BG Group <BG.L>, Royal Dutch Shell
<RDSa.L>, Tullow Oil <TLW.L>, and Cairn Energy <CNE.L> gained
0.9 to 3.8 percent, helped by a rally in crude <CLc1>, up above
$72 per barrel as demand sentiment improved.
IT'S A MAN'S WORLD
British hedge fund manager Man Group <EMG.L> topped the FTSE
<> leaders board, up 8.0 percent, after the company posted
better-than-expected annual profits and said a decline in its
asset values has bottomed out since March.
Banks extended Wednesday's gain as euro zone fears ebbed and
risk appetite improved. Lloyds Banking Group <LLOY.L>, Royal
Bank of Scotland <RBS.L> and Barclays <BARC.L> added 3.3 percent
- 3.8 percent.
The market took heart from comments from an official in
China which allayed fears that the country may be distancing
itself from euro zone debt holdings. [].
Miners were good performers, helped by firmer metal prices,
and as Australia left open the possibility of watering down its
"super tax" on the sector. []
Vedanta Resources <VED.L>, Rio Tinto <RIO.L>, Kazakhmys
<KAZ.L> and Fresnillo <FRES.L> climbed 4.2 percent to 6.1
percent.
A batch of U.S. data is due later in the session, with the
second reading for Q1 GDP and the latest weekly jobless claims
due at 12.30 GMT giving an indication on the recovery stateside.
U.S. stock index futures pointed to a strong rebound on Wall
Street on Thursday after a late sell-off in the previous
session, with the S&P 500 <SPc1>, Dow Jones <DJc1> and Nasdaq
100 <NDc1> futures all up sharply.
(Editing by Elaine Hardcastle)
