* FTSE rises as banks lead on result, Basel scale back
* AstraZeneca fuelled by heart drug prospects
By David Brett
LONDON, July 27 (Reuters) - Britain's top shares powered
higher in midsession trade on Tuesday, led by banks as European
peers posted robust results and after financial regulators said
they would scale back proposals to toughen regulation.
By 1035 GMT, the FTSE 100 <> index was up 41.18 points,
or 0.8 percent, at 5,392.30, just shy of breaking even for the
year at 5,412.88, and after closing on Monday at its highest
level since May 13.
Banks surged higher after second-quarter results from
European peers Deutsche Bank <DBKGn.DE> and UBS <UBSN.VX>.
Lloyds Banking Group <LLOY.L>, Barclays <BARC.L> and Royal Bank
of Scotland <RBS.L> were up between 4.6 and 7.4 percent.
"The major European banks are echoing the outperformance of
their U.S. peers and that has helped lift optimism," said Jimmy
Yates, head of equities at CMC Markets.
The Basel Committee of global banking supervisors said late
on Monday it would scale back many of its proposals to beef up
bank capital and liquidity rules was supportive for the sector,
signalling concessions in the face of lobbying by banks.
[]
Investors were also still on a high after the European bank
stress tests published late on Friday unearthed no nasty
surprises.
Market sentiment further improved as figures showed British
retail sales grew at their fastest pace in three years in July,
and retailers were their most upbeat in six years about the
prospects for August. []
Stock index futures pointed to a higher open for Wall Street
on Tuesday, with investors awaiting a batch of U.S. data,
including July's consumer confidence report, due at 1400 GMT.
ASTRAZENECA
Drugmaker AstraZeneca <AZN.L> rose 3 percent, having posted
falls in the previous two sessions, as U.S. Food and Drug
Administration documents, released ahead of a July 28 advisory
panel, raised hopes for its experimental blood thinner Brilinta.
AstraZeneca will post second-quarter results on Thursday.
BP <BP.L> propped up the energy sector, rising 0.5 percent
after saying it would take a charge as a result of the Gulf of
Mexico oil spill amounting to $32.2 billion, driving the firm to
a second quarter loss of $16.97 billion. [].
It also confirmed Tony Hayward will step down as chief
executive on Oct. 1 and be replaced by Robert Dudley, the U.S.
executive managing BP's response to the spill in the Gulf of
Mexico.
Miners rose as investor appetite for risk returned, with
Vedanta Resources <VED.L> and Kazakhmys <KAZ.L> top performers
up 1.9 and 1.5 percent respectively.
Xstrata <XTA.L> added 0.6 percent, ahead of results next
week, as it posted a 3 percent fall in first half copper output
and flat coal production. []
African Barrick Gold (ABG) <ABGL.L> fell 0.6 percent after
it cut its full-year production guidance due to delays in
accessing higher grade from its new Buzwagi mine in Tanzania.
Gold miners Fresnillo <FRES.L> and Randgold <RRS.L> were
also lower, down 2.1 and 1.5 percent.
Elsewhere on the downside, Intercontinental Hotels <IHG.L>
shed 7.9 percent on trader talk of a placing of 29.9 million
shares at between 1,120 to 1,130 pence each by BarCap.
ARM Holdings <ARM.L> dropped 2.3 percent after the chip
designer reported its second-quarter results and analysts struck
a cautious note on the shares citing valuation grounds after
their recent strong performance.
(Editing by Karen Foster)
