FTSE rises early on Vodafone, banks; oils fall

* FTSE 100 up 0.75 pct

* Vodafone rebounds after announces share buyback programme

* Lower oil prices weigh on energy stocks

By Dominic Lau

LONDON, July 23 (Reuters) - Britain's top share index tracked U.S. and Asian markets higher early on Wednesday, as Vodafone (VOD.L) gained after announcing a share buyback programme and lower oil prices eased inflation worries.

Index heavyweight Vodafone climbed 2.4 percent, recovering some of the previous session's steep losses, after the mobile phone giant announced a surprise 1 billion-pound ($2 billion) share buyback programme. [ID:nL23939638]

Vodafone shares slumped almost 14 percent on Tuesday after the group said its full-year revenue would be at the bottom of a previously stated forecast.

By 0744 GMT, the FTSE 100 .FTSE was up 40.3 points, or 0.75 percent at 5,404.4, after losing 0.7 percent on Tuesday.

Oil shares slipped as crude prices CLc1 fell. BP (BP.L) dipped 0.7 percent, while Royal Dutch Shell (RDSa.L) was down 0.3 percent and gas producer BG Group (BG.L) shed 1.3 percent.

"From an economic prospective, a fall in oil prices is a helpful development ... (But) keeping things in perspective, a fall in the oil prices is still relatively modest in the context of the absolute level," said Darren Winder, equity strategist at Cazenove.

"We will need to see a significant further decline in oil prices from here before we start contemplating a much more favourable economic outlook than we have started to discount."

Winder added lower oil prices would encourage rotation into financials.

Banks were the biggest sectoral gainer, with Barclays (BARC.L), HSBC (HSBA.L), HBOS HBOS.L, Lloyds TSB (LLOY.L) and Standard Chartered (STAN.L) up 1.3 to 5.2 percent.

Royal Bank of Scotland (RBS.L) advanced 3.6 percent. Commonwealth Bank of Australia (CBA.AX) said it was in talks to buy ABN AMRO's Australia and New Zealand operations, as it looks to strengthen its institutional banking and markets business.

BHP Billiton (BLT.L) fell 1.6 percent. The miner reported strong quarterly production gains led by copper and iron ore, but warned of a looming decline from the world's biggest copper mine. [ID:nSYD259450]

Within the mining sector, Rio Tinto (RIO.L), Anglo American (AAL.L), Xstrata (XTA.L), Vedanta Resources (VED.L), Lonmin (LMI.L), Eurasian Natural Resources (ENRC.L) and Ferrexpo (FXPO.L) were down 1.1 to 3.9 percent.

Centrica (CNA.L) put on 1.3 percent after the British energy company said it was to double its stake in Belgian generation and supply company SPE SA to 51 percent for 515 million euros ($820 million).

Housebuilders, which have been battered on concerns about falling property prices, weaker economic outlook and the possibility of higher interest rates, also bounced, with Taylor Wimpey (TW.L) up 9.7 percent and Barratt Developments (BDEV.L) gaining 6.3 percent. (Additional reporting by Atul Prakash; Editing by Rory Channing)