* Banks surge; Lloyds sees return to profit
* Miners rebound; metals prices harden
* 'Quadruple witching' creates volatility
By David Brett
LONDON, March 19 (Reuters) - Financials led Britain's FTSE
100 share index to a 21-month high by midday on Friday, after
Lloyds Banking Group <LLOY.L> said it would return to
profitability in 2010, while some defensives lagged.
By 1134 GMT the FTSE 100 <> index was up 32.43 points
at 5,675.05, having closed almost unchanged in the previous
session.
The market extended gains after the 'quadruple witching'
expiries of futures and options contracts.
Banks were the biggest gainers, having slipped on Thursday,
with Barclays <BARC.L> and Royal Bank of Scotland <RBS.L> up 2.2
to 5.9 pct.
Bailed-out British lender Lloyds Banking Group <LLOY.L> said
it would return to profitability in 2010 after two years of
heavy losses, helped by lower than expected bad debts and tight
cost controls. Its shares rose 9.3 percent. []
ICAP <IAP.L> added 1.3 percent, lifted by talk that the
inter-dealer broker might be close to finding a buyer for its
cash equities business, traders said.
The world's largest listed hedge fund Man Group <EMG.L> and
fund firm Schroders <SDR.L> each climbed 2 percent.
Resolution <RSL.L> rose 1.4 percent. Deutsche Bank kept its
"hold" rating and cut its target price on the firm, but said
results next week cast a spotlight on an "unreasonably cheap
valuation".
Life insurers were also firmer, with Aviva <AV.L> gaining
0.3 percent after Aviva Investors, its asset management arm,
said it plans to expand in the Asia-Pacific region by hiring
bond and equity fund managers in Singapore and setting up a
sales offices in Japan.
Peers Legal & General <LGEN.L> and Prudential <PRU.L> added
1.3 and 0.7 percent, respectively.
COMMODITY SUPPORT
Energy shares were high up on investors' wanted lists. BP
<BP.L>, BG Group <BG.L> and Royal Dutch Shell <RDSa.L> rose 0.3
and 0.8 percent respectively.
Australia's Arrow Energy <AOE.AX> asked for trading in its
shares to be suspended, stoking speculation that Royal Dutch
Shell and PetroChina <0857.HK> would sweeten their joint $3
billion offer for the coal-seam gas producer.
Oil explorer Tullow Oil <TLW.L> was up 0.1 percent, helped
by a target price hike from RBS.
Miners rebounded from Thursday's falls, underpinned by
firmer metal prices. Eurasian Natural Resources <ENRC.L>
Fresnillo <FRES.L>, Kazakhmys <KAZ.L>, Xstrata <XTA.L> and BHP
Billiton <BLT.L> rose 0.3 to 2 percent.
Among individual movers, British Airways <BAY.L> put on 0.9
percent on hopes that the Unite union's last-ditch talks with
BA's management will lead to a strike by cabin crew this weekend
being averted. []
Defensive stocks were prevalent among the list of fallers on
the FTSE. Utilities Centrica <CNA.L>, Severn Trent <SVT.L> and
National Grid <NG.L> fell 0.9-1.1 percent, while British
American Tobacco <BATS.L> was down 0.4 percent.
Energy suppliers International Power <IPR.L> and Scottish
and Southern Energy <SSE.L> shed 1.0 and 0.7 percent
respectively.
No significant economic data is scheduled for release on
Friday, either in the UK or the United States.
(Editing by Rupert Winchester)
