* FTSE 100 up 63.47 points at 4,216.16
* Banks, oils strongest gainers
* UK interest rates seen falling 0.5 pct on Thursday
By Nicholas Vinocur
LONDON, Nov 27 (Reuters) - Britain's top share index gained
1.5 percent by midday on Thursday, lifted by overnight gains in
global markets as banks traded higher and oil stocks rallied on
bailout hopes for the U.S. auto sector.
By 1210 GMT, the FTSE 100 <> was up 63.47 points, or
1.5 percent, at 4,216.16, after ending 0.4 percent lower in the
previous session.
Oil shares added most points to the index, with BP <BP.L>
gaining 2.3 percent, Royal Dutch Shell <RDSa.L> rising 1.6
percent and Tullow Oil <TLW.L> advancing 5.3 percent.
However, analysts warned that companies are set to feel more
pain from the global slowdown.
"Some people might start to think about investing in a
recovery, but I don't think we're out of the woods quite yet. If
you look at earnings expectations for the coming year, the
market is clearly discounting a very sharp fall," said Elin
Anden, a European equity strategist at Cazenove.
Banks were also broadly higher with Standard Chartered
surging 11.9 percent to top the FTSE 100 leaderboard as a rights
issue was well-received by the market, while Lloyds TSB <LLOY.L>
added 6.5 percent and Barclays <BARC.L> added 4.7 percent.
U.S. shares rose overnight on bargain-hunting in tech
stocks, while hopes that General Motors <GM.N> will reach an
agreement on a government aid package helped to offset anxiety
over Wednesday's batch of gloomy economic data, which saw
consumers cut spending at its steepest rate in over seven years.
U.S. markets are closed for the Thanksgiving holiday and
trading on India's stock exchanges was stopped after a series of
attacks by suspected Islamist gunmen in the commercial capital
Mumbai killed at least 101 people.
Old Mutual <OML.L> was 2.6 percent higher. The insurer said
it has scrapped the sale of its majority stake in South African
general insurer Mutual & Federal, blaming "increasingly
difficult economic conditions".
Tension among policymakers over Britain's economic woes
surfaced as the Bank of England's David Blanchflower -- known as
the arch-dove of the nine-member voting panel -- was quoted as
saying that interest rates should have come down sooner than
they did to prevent a prolonged downturn. []
The BoE slashed rates by an unprecedented 1.5 percentage
points this month to shore up the economy, which on Thursday
showed more signs of strain as house prices fell another 0.4
percent in November, following a record drop the previous month,
a survey showed. []
A Reuters poll of economists found that the BoE will cut
rates by at least 50 points when it meets on Thursday [].
Two UK retailers bore the brunt of a downturn in consumer
spending, with high street icon Woolworths <WLW.L> putting its
business into administration, and furniture chain MFI announcing
the closure of 26 of its 46 stores. []
Kingfisher <KGF.L> was the FTSE 100's biggest faller,
sinking 3.9 percent after Europe's top home improvement retailer
beat forecasts with an 8.3 percent rise in third-quarter profit
but said trading conditions were tough. []
Other retailers saw their share prices climb, however, after
the UK government cut value added tax by 2.5 percent in a bid to
boost consumer spending.
Tesco <TSCO.L> was up 2.3 percent, J Sainsbury <SBRY.L> rose
1.1 percent, and Marks & Spencer <MKS.L> gained 2.7 percent as
retailers rolled out aggressive discount campaigns ahead of the
Christmas shopping season.
Mid-cap DSG International <DSGI.L> dropped 7.1 percent after
Europe's second-largest electrical goods retailer swung to a
first-half loss and suspended its dividend as it grapples with
the deepening consumer downturn. []
TUI Travel <TT.L> rose 1.5 percent after Europe's biggest
travel firm reported a 43 percent increase in full-year pretax
profit as it benefited from a strong performance in the United
Kingdom and the delivery of merger synergies. Rival Thomas Cook
<TCG.L> was down 1.2 percent.
(Reporting by Nicholas Vinocur; editing by Simon Jessop)
