Energy weakness knocks FTSE; banks, miners firm

                                
 * FTSE 100 index down 0.5 pct
                                
 * Integrated oils fall; BG Group weak after results
                                
 * Miners higher, supported by firmer metal prices
                                
 * Banks supported by broker strategy upgrade
                                
 
                                
 By Jon Hopkins
                                
 LONDON, July 28 (Reuters) - Weak energy issues dragged
Britain's top share index lower by midday on Wednesday, with BG
Group <BG.L> a big faller on its quarterly results, although
heavyweight miners and banks held firm.
                                
 At 1111 GMT, the FTSE 100 <.FTSE> index was down 24.58
points at 5,341.13, having hit an early peak of 5,398.10, just
below resistance at 5,399 and the psychologically important
5,400 level.
                                
 "It's running out of steam a bit ... I hate to use the words
profit-taking, but anyone involved in running these stocks up
since the beginning of the earnings season and the end of the
European banks stress tests is probably sitting on some decent
gains," said David Morrison, market strategist at GFT Global.
                                
 "Maybe we have just run up too far, too fast," Morrison
said.
                                
 Falls by integrated oils was the main drag on the blue chips
around midday, with BG Group <BG.L> the worst sector performer
after its second-quarter numbers failed to excite.
[ID:nLDE66R06C]
                                
 "Although BG's second-quarter figures were above consensus,
we do not see any strong drivers of near-term share price
performance in the results," said Collins Stewart in a note.
                                
 Peers BP <BP.L> and Royal Dutch Shell <RDSa.L> shed 1.5 and
0.3 percent, respectively, with crude prices <CLc1> also lower.
                                
 Investors had a deluge of other corporate earnings news to
digest on Wednesday.
                                
 Invensys <ISYS.L> was the top FTSE 100 faller, losing 6.1
percent after the engineer's trading update raised concern over
its Rail division's performance for Nomura, which cut its
estimates for the firm. [ID:nLDE66R0EA]
                                
 Beverage-can maker Rexam <REX.L> shed 4.1 percent as the
firm said visibility remained low and the global economic
outlook uncertain after posting an above-forecast rise in
underlying first-half pretax profits. [ID:nLDE66Q1Z0]
                                
 Weakness in heavyweight drugmakers also weighed on the blue
chips, with AstraZeneca <AZN.L> shedding 0.5 percent ahead of
second-quarter results on Thursday, while GlaxoSmithKline
<GSK.L> fell 1.4 percent as it traded ex-dividend on Wednesday.
                                
 Scottish & Southern Energy <SSE.L>, down 4.2 percent, also
traded without its payout attractions.
                                
 
                                
 BANKS BOOSTED
                                
 Banks were the best performing blue chips on a sector basis,
extending the rally made since Friday's publication of European
stress tests on the sector, and after Basel regulation news.
                                
 The sector was helped by an upgrade in strategy rating by
Deutsche Bank to "neutral" from "underweight", with the broker
noting the Basel Committee on Banking Supervision's decision to
make a "less stringent" set of regulatory recommendations.
                                
 HSBC <HSBA.L> was the top banking gainer, up 1.2 percent, in
demand ahead of second-quarter results due next Monday, while
Royal Bank of Scotland <RBS.L>, Barclays <BARC.L>, and Standard
Chartered <STAN.L> added between 0.2 and 0.6 percent.
                                
 Lloyds Banking Group <LLOY.L> missed out on the rally,
however, shedding 2.1 percent. The bank has shelved plans to
sell off its 60 percent stake in mid-cap wealth manager St
James's Place Capital <SJP.L>, which rose 4.6 percent.
 Miners also lent their strength to the blue chips, led by
Xstrata <XTA.L>, up 1.5 percent after metal prices rose and
copper hit its highest levels since mid-May, helped by an
assurance from China on the economic growth outlook.
                                
 Bank of England Governor Mervyn King and fellow Monetary
Policy Committee members Charles Bean, Paul Fisher, David Miles
and Andrew Sentance took questions on the May Inflation Report
from parliament's Treasury Committee on Wednesday.
                                
 "I am arguing that we have room to use monetary policy in
either direction. I don't want to pre-judge where it will need
to go. Our view so far has been is that we have not need to move
in either direction, but we are prepared to do so in either
direction, as seems appropriate," said BoE's King.
                                
 Adding to the picture of recovery in the UK, house prices in
England and Wales rose 0.1 percent on the month and 8.4 percent
on the year in June, figures from the Land Registry showed on
Wednesday. [ID:nLAH006771]
                                
(Editing by Simon Jessop)