FTSE up as flu fears abate; oils, miners lead

* Shell leads oils higher after results

* Miners rally with commodity prices

* British Airways recovers as swine flu fears abate

* Drugs, defensives retreat

By Jon Hopkins

LONDON, April 29 (Reuters) - Britain's leading share index gained 0.4 percent in early trading on Wednesday as swine flu fears abated and miners and oils led the risers after Royal Dutch Shell's (RDSa.L) first-quarter results beat forecasts.

At 0803 GMT, the FTSE 100 .FTSE index was up 15.03 points at 4,111.43, regaining the 4,100 level. The benchmark index closed 70.61 points, or 1.7 percent lower on Tuesday.

"We can say the market is concerned but not panicking in terms of swine flu and some of the weakness we have seen is being offset by upbeat economic data and the corporate news has been reasonably strong as well which has allowed us to get into positive territory," said Henk Potts, market strategist at Barclays Wealth.

Oil shares moved higher reflecting a firmer crude price CLc1 on demand interest and after first-quarter results from Royal Dutch Shell (RDSa.L) beat expectations.

The Anglo-Dutch firm followed its peers in reporting a sharply lower first-quarter profit due to lower crude prices while outperforming analysts' forecasts.

Shell said its current cost of supply (CCS) net income fell 58 percent compared to the same period in 2008 to $3.30 billion.

Royal Dutch Shell shares gained 1 percent, with BG Group (BG.L) up 0.4 percent, Cairn Energy (CNE.L) ahead 0.8 percent and Tullow Oil (TLW.L) gaining 2.4 percent.

But BP (BP.L) missed out, losing 0.5 percent after its own forecast-busting first-quarter numbers on Tuesday were trumped.

Miners were the best performing blue chips as commodity prices rebounded from recent weakness as fears over the impact of swine flu on global demand abated with no fresh cases of the virus reported overnight.

Kazakhmys (KAZ.L), Rio Tinto (RIO.L), Anglo Americam (AAL.L), Lonmin (LMI.L), Xstrata (XTA.L) and BHP Billiton (BLT.L) gained between 1.0 and 3.6 percent.

British Airways BAY.L was a big individual FTSE 100 gainer, up 4.5 percent with airlines recovering after being hard hit earlier this week by worries over the impact of swine flu.

Other travel shares also rose, with tour operators Thomas Cook Group (TCG.L) and TUI Travel (TT.L), and cruises operator Carnival (CCL.L) adding 0.6 to 1.7 percent.

BANKS BOUNCE

Banks saw a bounce back after falls on Tuesday amid worries that possible fresh capital raisings could still be required by major banks when the U.S. government's stress tests are revealed next month.

Lloyds Banking Group (LLOY.L), Royal Bank of Scotland (RBS.L), Barclays (BARC.L) and Standard Chartered (STAN.L) gained between 1.1 and 3.4 percent, although HSBC (HSBA.L) missed out, shedding 1.4 percent.

Home Retail Group (HOME.L) was the top FTSE 100 faller, down 4.1 percent after the owner of Argos stores and the Homebase do-it-yourself chain posted a 24 percent drop in underlying full-year profit and said trading conditions would stay tough.

Elsewhere on the high street, food retailer Tesco (TSCO.L) fell 2.5 percent, while rival J Sainsbury (SBRY.L) lost 0.6 percent as defensive shares fell out of favour again as the gains from the swine flu fears were reversed.

Data released late on Tuesday showed J Sainsbury was the fastest growing of the big four supermarkets over Easter, market researchers Nielsen said. [nLS649126]

Drugs giant GlaxoSmithKline (GSK.L) fell 1.4 percent as the boost from the benefits of its flu drug were tempered.

"There is still a lot to get through today. We've got to listen to the Federal Reserve and we get first-quarter U.S. GDP later ... so certainly there is a lot to play for throughout the day," Potts said.

The U.S. GDP figures come after Tuesday's data showed the biggest monthly rise in U.S. consumer confidence in three years and a decline in the pace of home price falls.

The Federal Reserve rate decision is due at 1815 GMT although no changes are expected in rates already at rock bottom. (Editing by Greg Mahlich)