* FTSE 100 index gains 0.7 percent
* Banks higher; RBS up on hopes for asset protection exit
* Oils benefit from higher crude, Investec initiations
By Jon Hopkins
LONDON, Jan 21 (Reuters) - Britain's top share index pushed
higher by mid-session on Friday, lifted by a rally in banks and
a recovery in commodity issues after two days of sharp losses.
At 1201 GMT, the FTSE 100 index <> was up 41.05 points,
or 0.7 percent, at 5,908.96, having on Thursday reached its
lowest closing level in five weeks.
"Investor sentiment in London is a bit more upbeat this
morning, with strength in some banking stocks helping to shake
off yesterday's caliginous mood," said David Jones, chief market
strategist at IG Index.
Royal Bank of Scotland <RBS.L> topped the FTSE 100 risers
list, up 6.9 percent on reports the part-nationalised bank could
leave the government's asset protection scheme early.
[]
Fellow part-nationalised lender Lloyds Banking Group
<LLOY.L> gained 1.8 percent, while global heavyweight HSBC
<HSBA.L> added 1 percent as the banking sector rallied.
Energy issues provided the main strength for the FTSE 100
index as the crude price <CLc1> pushed back above $90 a barrel.
BG Group <BG.L> added 1.8 percent and Royal Dutch Shell
<RDSa.L> gained 0.9 percent, supported as well by initiations
from Investec Securities, which started both stocks with "buy".
Miners also recovered following recent sharp falls after
soaring growth data from China raised fears of further interest
rate rises from the world's biggest consumer of raw materials.
Xstrata <XTA.L> and platinum miner Lonmin <LMI.L> were the
best performers, both up 1.3 percent.
Search software firm Autonomy <AUTN.L> gained 2.9 percent,
after recent weakness, helped by news of two licence deals for
its Intelligent Data Operating Layer product. []
UTILITIES FROZEN OUT
Utilities, seen as defensive, were the main blue-chip
fallers as investors' risk appetite returned. Gas distributor
Centrica <CNA.L> lost 1.6 percent and International Power
<IPR.L> shed 0.9 percent.
National Grid <NG.L>, down 1.1 percent, was weak after the
New York Public Service Commission refused a proposal by the
UK's largest utility to recover all of its estimated deferred
costs for the Niagara Mohawk unit. []
Luxury goods group Burberry <BRBY.L> also fell 1.1 percent,
extending Thursday's falls on worries over the impact of any
Chinese rate rise on its key Asian markets.
British retail sales suffered their worst December after a
sharp fall in sales of food and fuel due to harsh weather and
rising prices, the Office for National Statistics said.
[]
U.S. stock futures <DJc1> and <SPc1> indicated a modestly
higher showing on Wall Street on Friday, extending a late rally
in the previous session, with another batch of key corporate
earnings the main focus.
Solid figures from conglomerate General Electric <GE.N>
stood out early on.
"It's another bellwether firm from the U.S. beating market
expectations, so it (builds on) the strength of the recent
corporate earnings season," said Joshua Raymond, market
strategist at City Index.
(Editing by David Hulmes)
