UK's FTSE 100 steadies near 2-month highs
* FTSE 100 edges up 0.1 pct, steadies near 2-month highs
* IAG rises after swinging back to profit
* RBS falls as H1 earnings disappoint some traders
LONDON, Aug 2 (Reuters) - Britain's benchmark equity index steadied near two-month highs on Friday, buoyed by signs of an improvement in the global economy and higher profits at airline group IAG.
Part-nationalised Royal Bank of Scotland fell, however, acting as one of the biggest drags on the market after its interim earnings disappointed several traders. IAG and RBS were the most heavily traded FTSE 100 stocks in terms of volume.
The benchmark FTSE 100 equity index edged up by 0.1 percent, or 4.46 points, at 6,686.44 points in early trading, steadying near two-month highs reached earlier this week.
The index has risen some 11 percent from lows of around 6,000 points reached at the start of June, boosted by signs of a slow recovery in the UK and European economies, and the FTSE 100 remains up by around 13 percent since the start of 2013.
Global equity markets have also rallied from their June lows due to expectations that any scaling back in economic stimulus measures by the U.S. Federal Reserve will be slow and gradual, which should continue to support stock markets.
"It seems investors' confidence has come back to the markets this week," said Spreadex trader Lee Mumford.
Airline IAG topped the FTSE leaderboard with a 3 percent rise after it swung back to a second quarter profit after making a loss a year ago.
RBS fell 4.3 percent as its first-half earnings underwhelmed some traders, although investors welcomed its appointment of Ross McEwan as new chief executive.
"Headline numbers damp with operating profit and total revenues deteriorating in the period. Worryingly, the bank's trading division performed very poorly with operating profit and revenues declining rapidly," said Joe Rundle, head of trading at ETX Capital.
Markets were also awaiting U.S. employment data later.
U.S. employers probably hired enough workers in July to push the jobless rate to a near four-year low, which could bolster expectations the Federal Reserve will start drawing down its huge economic stimulus programme later this year. (Editing by Catherine Evans)