* Miners and oil stocks gain as commodity prices rally
* Investors eye two-day U.S. Fed meeting
* U.S. futures point to higher open
By David Brett
LONDON, Sept 22 (Reuters) - Britain's leading share index
was 1 percent higher at mid-session on Tuesday, with resurgent
commodities prices and a weaker dollar boosting mining and
energy stocks.
By 1058 GMT, the FTSE 100 <> was up 48.69 points at
5183.05, after closing 0.7 percent lower on Monday to end a
six-session winning streak.
"The dollar index is severely weak... losing most of the
gains it has made in the last two trading days and this is
helping demand for dollar-based assets such as copper and crude
oil," said Joshua Raymond, Market Strategist at City Index.
Miners added the most points to the index as metals prices
turned positive. Fresnillo <FRES.L>, BHP Billiton <BLT.L>,
Kazakhmys <KAZ.L>, Lonmin <LMI.L>, Rio Tinto <RIO.L>, Xstrata
<XTA.L> and Vedanta Resources <VED.L> rose 2.2 to 5.1 percent.
Oil majors advanced as crude prices <CLc1> rose above $70 a
barrel on a technical rebound from a 3.2 percent decline. BG
Group <BG.L>, BP <BP.L>, Cairn Energy <CNE.L>, Royal Dutch Shell
<RDSa.L>, and Tullow Oil <TLW.L> were up 1.1 to 2.2 percent.
The FTSE has rebounded close to 50 percent since the lows
hit in March, leaving investors cautious as to how far this
rally can continue.
"We have seen a degree of short positions remain so far and
this indicates that today's gains may be limited, at least until
tomorrow's FOMC rate decision," Raymond added.
Investors will also be keeping a close eye on a two-day U.S.
Federal Reserve meeting, which begins on Tuesday, and a Group of
20 leaders' meeting at the end of the week.
Carnival <CCL.L> rose 4.1 percent after Banc of
America-Merrill Lynch added the firm to its "Europe 1" list.
Imperial Tobacco <IMT.L> gained 0.4 percent, after the
world's No. 4 cigarette group said its current-year trading
remained in line with its own expectations. []
"We continue to see Tobacco as the most attractive of the
European consumer staples sectors, and Imperial ... remains the
best way to play the space," RBS analysts wrote in a note.
Cadbury <CBRY.L> edged up 0.5 percent. The confectioner has
approached Britain's takeovers panel to ask Kraft Foods <KFT.L>
either to make a formal takeover proposal or walk away for six
months, the Financial Times said, citing people close to the
matter. []
UTILITIES LAG
Utilities and food retailers weighed on the index, as
investors switched into riskier cyclical assets.
Severn Trent <SVT.L> shed 2.6 percent as investors fretted
over the possibility of a rights issue from the water company.
Evolution Securities downgraded the stock to "add" from "buy".
[]
Fellow utility firms National Grid <NG.L> and United
Utilities <UU.L> shed 0.7 and 2.6 percent respectively.
Food retailers were also lower, with supermarket chain Tesco
<TSCO.L> down 0.5 percent after the Daily Telegraph reported its
retailing services chief executive Andrew Higginson warned of a
flat Christmas at best for British retailers.
The paper also cited a survey among 32 business leaders,
which found retailers feared renewed setbacks in 2010.
WM Morrison <MRW.L> and J Sainsbury <SBRY.L> lost 0.7 and
1.2 percent respectively.
However, Marks and Spencer found support <MKS.L>, rising 2.6
percent after Banc of America-Merrill Lynch raised its price
target to 450 pence from 410 pence and reiterated its "buy"
rating on the stock. []
Investors will be focused on U.S. monthly house prices data
for July at 1400 GMT.
U.S. stock index futures pointed to a higher opening on Wall
Street, the futures for the S&P 500 <SPc1>, Dow Jones <DJc1> and
Nasdaq 100 <NDc1> were all up 0.7 percent.
(Editing by Lin Noueihed)
