* FTSE 100 up 1.3 percent
* Barclays surges 63 percent after reassures on profits
* Heavyweight commodities gain
* Drugmakers up on Pfizer purchase of Wyeth
By Simon Falush
LONDON, Jan 26 (Reuters) - Britain's top share index rose
1.3 percent by midday on Monday as banks gained after Barclays
reassured investors by saying it would report healthy profits,
while commodity stocks rose on firmer crude and metal prices.
By 1144 GMT the FTSE 100 index <> was up 51.38 points
at 4,103.85 after closing 0.24 points higher on Friday. The
blue-chip index is down 7.5 percent so far this month after
plunging more than 31 percent last year -- the worst annual drop
since its launch in 1984.
Barclays <BARC.L> is not seeking capital from private
investors or the state as it remains profitable and can absorb a
2008 writedown of 8 billion pounds, the bank said in a letter to
customers. []
This saw shares in Barclays, which had tumbled to below
below 50 pence last week from above 190 pence earlier in the
month, snap a nine-day losing streak and rocket 58 percent
higher to 80.4 pence.
"The market's had a long sell-off and it has been slow and
steady, but the market was overdue a gain and the bank news has
been a catalyst for that," said Rob Griffiths, equity strategist
at Cazenove.
The UK banking index <.FTNMX8350> gained 8.6 percent, with
Lloyds <LLOY.L> jumping 22.3 percent , Royal Bank of Scotland
<RBS.L> surging 16.5 percent and HSBC <HSBA.L> up 5.1 percent.
SINKING FEELING
However data showed that the underlying picture for the
economy in general and the banking sector in particular
continues to look bleak.
British house prices fell by 1.0 percent in January and are
9.4 percent lower than a year earlier, property analysts
Hometrack said on Monday in their monthly survey of estate
agents.
On Hometrack's measure, house prices have fallen 10.2
percent from their peak in August 2007 after 16 straight months
of decline. []
The number of mortgages approved for house purchases rose in
December from the previous month's record low but remained
barely half their level of a year ago, data from the British
Banks' Association showed.
Analysts are already fully factoring weak data into share
prices, and looking for any signs that the worst might be over
to point to economic recovery.
"There is some slight suggestion that we're over the worst
and some indicators are not as bad as feared," Jeremy
Batstone-Carr analyst at Charles Stanley said.
Global cooperation on the financial crisis is crucial to
helping revive the economy and stave off a new wave of
protectionism, British Prime Minister Gordon Brown said in a
speech on Monday.
Pharmaceutical stocks were supported on news that Pfizer Inc
<PFE.N>, the world's largest drugmaker is set to acquire rival
Wyeth, for $50.19 per share. []
AstraZeneca <AZN.L> added 0.4 percent while GlaxoSmithKline
<GSK.L> gained 2.1 percent.
Wolseley <WOS.L> tumbled 31 percent as the British plumbing
and heating supplies company said half-year profit would be
around two-thirds lower than last year and that its debt had
widened due to currency movements. []
Oil and gas producers were in positive territory as crude
prices gained ground touching $47 per barrel, well above a
trough of below $33 per barrel set last week <CLc1>.
BP <BP.L> gained 1 percent while Royal Dutch Shell <RDSa.L>
added 0.8 percent and BG Group <BG.L> was up 2.3 percent.
Miners were also in generally in the black as metals prices
were slightly firmer but Xstrata <XTA.L> fell 5.8 percent after
Citigroup cut it to "sell" from "hold".
(Editing by Sharon Lindores)
