FTSE up 0.5 percent; banks, miners rebound

* Banks rally; JPMorgan adds to “overweight” stance

* Miners bounce as bargain hunters move in

* BAES Systems, Kingfisher gain on results

* BT slides; Standard & Poor’s cut its debt rating

By David Brett

LONDON, Feb 18 (BestGrowthStock) – Britain’s leading shares were
higher at midday on Thursday, extending gains for a fourth day
as early profit-taking attracted bargain hunters back into the
market, with banks and commodities leading the risers.

By 1158 GMT, the FTSE 100 index (.FTSE: ) was up 26.18 points,
or 0.5 percent, at 5,302.82 after trading as high as 5,316.15,
its highest level in four weeks. The index closed 0.6 percent
higher on Wednesday.

“The recent run of straight gains indicates that investors
are hunting for buying opportunities,” said Joshua Raymond,
market strategist at City Index.

“The higher we go the more investors will be enticed into
cashing in their profits and this will be when investors will
need to make a decision over whether to consolidate or build on
positions,” Raymond said.

Banks were again among the top risers. The sector has beaten
off recent worries over euro zone debt issues and has been
bolstered in the previous two sessions by upbeat results from
Barclays (BARC.L: ) and BNP Paribas (BNPP.PA: ).

Barclays (BARC.L: ), Royal Bank of Scotland (RBS.L: ), Lloyds
Banking Group (LLOY.L: ), HSBC (HSBA.L: ) and Standard Chartered
(STAN.L: ) rose 0.4 to 1.5 percent.

JPMorgan added further to its “overweight” stance on
European banks, saying “the potential peak in the provisioning
cycle, coupled with record steep yield curves in most regions,
is a positive for banks profitability.”

Miners, which have fared well as concerns over China’s
monetary tightening have ebbed, were also on the front foot.

Fresnillo (FRES.L: ), Xstrata (XTA.L: ), Rio Tinto (RIO.L: ),
Kazakhmys (KAZ.L: ) and Vedanta Resources (VED.L: ) added 0.2 to 1.2
percent.

Oil majors rallied as crude (CLc1: ) prices hovered around $77
a barrel, with BG Group (BG.L: ), BP (BP.L: ) and Royal Dutch Shell
(RDSa.L: ) up 0.5 to 0.8 percent.

RESULTS LIFT

More robust results from London’s blue chips helped add
further momentum to the index, which is down 2 percent so far
this year on concerns over euro zone fiscal problems.

Defence contractor BAE Systems (BAES.L: ) was the top FTSE 100
riser, up 3.1 percent after its full-year results beat market
forecasts, with 2009 profit up 15 percent. [ID:nLDE61H0GU].

Kingfisher (KGF.L: ) rose 2.2 percent after Europe’s biggest
do-it-yourself retailer reported its fourth-quarter trading
update. [ID:nLDE61G29J]

The news lifted other retailers, with Home Retail (HOME.L: )
and Next (NXT.L: ) adding 0.2 and 0.5 percent respectively.

BT Group (BT.L: ) was a main drag on the FTSE 100, down 4.4
percent to a near seven-month low after credit rating agency
Standard & Poor’s cut its debt rating for the UK fixed-line
operator by one notch to BBB-minus, traders said.

Publishing and events group Reed Elsevier (REL.L: ) dipped 0.8
percent after the company confirmed its 2010 outlook.
[ID:nLDE61G2KQ]

Life insurers were also lower, with Legal & General
(LGEN.L: ), which reported fourth-quarter new business figures on
Wednesday, down 0.8 percent, and Aviva (AV.L: ), Resolution
(RSL.L: ) and Prudential (PRU.L: ) 0.8 to 1 percent lower.

Economic data suggested financing conditions remained tough
for UK firms. The Bank of England said lending to British
businesses contracted at its fastest ever pace in December,
after the flow of funds sharply reversed from November to drop
4.3 billion pounds on the month. [ID:nLDE61H0XE]

Focus will turn to the United States later in the session
with U.S. producer prices for January due for release at 1330
GMT and the Philadelphia Federal Reserve Bank’s business
activity index set for release at 1500 GMT.

Stock Market Trading

(Editing by Karen Foster)

FTSE up 0.5 percent; banks, miners rebound