Banks lead FTSE rebound; Vodafone up on India deal

* FTSE 100 up 1 percent

* Banks rise; Dubai World agrees debt restructure

* Vodafone gains on India 3G licence

By David Brett

LONDON, May 20 (BestGrowthStock) – Britain’s top share index rose on
Thursday, as banks led a recovery from sharp falls incurred in
the previous session, buoyed by better news on debt problems in
Dubai, while oils rallied on the back firmer crude prices.

By 0810 GMT, the FTSE 100 (.FTSE: ) was up 52.49 points, or 1
percent, at 5,210.57, having fallen 2.8 percent on Wednesday
when Germany’s naked short-selling ban hit sentiment.

Banks were the biggest gainers, having been among the
hardest hit in the previous session as investors took money out
of the sector fearing a combination of further regulation and
exposure to the euro zone’s sovereign difficulties would hit
their outlook.

Barclays (BARC.L: ), HSBC (HSBA.L: ), Royal Bank of Scotland
(RBS.L: ) and Lloyds Banking Group (LLOY.L: ) added 0.5-1.5 percent.

While debt issues continue to hang over Europe there was
better news from the Emirates where Dubai World, the state-owned
conglomerate, has reached a deal in principle to restructure
$23.5 billion in debt with the core lenders holding 60 percent
of the exposure.

“We are still in an environment that has been overwhelmed by
a phase of volatility, which will be with us for a while,” Mike
Lenhoff, chief strategist at Brewin Dolphin said.

“We are not going to proceed too far from here, maybe this
is going to be a bit of a trading level for the market.”

South African investment bank and asset manager Investec
(INVP.L: ) climbed 1.5 percent after meeting its expectations on
full-year earnings. [ID:nLDE64I2KQ]

Energy stocks also bounced back, helped by firmer crude
(CLc1: ) prices which gained after a less-than-expected rise in
U.S. crude stocks. BG Group (BG.L: ), BP Group (BP.L: ) and Royal
Dutch Shell (RDSa.L: ) advanced 0.7-1.5 percent.

UK oil explorer Cairn Energy (CNE.L: ) rose 2.6 percent after
it said it planned to ramp up production at its oil fields in
India after laying a pipeline which will enable it to sell more
oil to refiners.

MINERS RALLY WITH METALS

Miners rallied with rebounding metal prices, shrugging off
early falls as the market initially reacted to downgrades from
BofA Merrill Lynch, which cited near term headwinds from China
and Europe hitting the sector.

Rio Tinto (RIO.L: ), Xstrata (XTA.L: ), Kazakhmys (KAZ.L: ), Anglo
American (AAL.L: ) and Antofagasta (ANTO.L: ) added 1.5-2 percent.

British Land (BLND.L: ) rose 1.6 percent, boosted by a UBS
upgrade to “buy” from “neutral” in the wake of the property
group’s full-year results on Tuesday.

Vodafone (VOD.L: ) climbed 2.6 percent after the mobile
communications firm and top Indian carrier Bharti Airtel
(BRTI.BO: ) paid a combined $5.1 billion for 3G mobile licences in
India – the world’s fastest growing mobile phone market.
[ID:nSGE64J07X]

On the downside, National Grid (NG.L: ) shed 6 percent, the
top bluechip faller, after the utility announces a rights issue
to raise 3.2 billion pounds, as it posted an expected 12 percent
rise in profit. [ID:nLDE64J08R]

Brewer SABMiller (SAB.L: ) fell 5.4 percent after saying it
expected consumer spending to recover only towards the end of
2010, as it reported an adjusted earnings per share of 161.1
U.S. cents, narrowly missing forecasts. [ID:nLDE64I259]

Growth Stocks

(Editing by Sharon Lindores)

Banks lead FTSE rebound; Vodafone up on India deal