Gains in financials lead UK's FTSE higher
* FTSE 100 up 0.8 pct in mid-session trade
* Financials lead market higher, upgrade boost Barclays
* Equities rise as Summers quits race to head Fed
By Sudip Kar-Gupta
LONDON, Sept 16 (Reuters) - Britain's top share index rose on Monday, led by financials, as Lawrence Summers quit the race to head the U.S. Federal Reserve, boosting prospects of a more measured scale-back in stimulus measures.
The blue-chip FTSE 100 index was up by 0.8 percent, or 54.39 points, at 6,638.19 points in mid-session trade, with gains in financial stocks contributing the most points to the index's advance.
The financial sector added 13.5 points to the FTSE 100, with Barclays rising 1.8 percent after Nomura upgraded its rating on the stock to "buy" from "reduce".
Equity markets worldwide were boosted by Summers' decision to drop out of the race to become the next head of the Fed, with Janet Yellen now seen as the new front-runner.
Yellen is regarded by investors as more supportive than Summers of the Fed's bond-buying programme known as "quantitative easing" (QE), which has driven much of this year's global equity rally, with the FTSE 100 up 12.5 percent since the start of 2013.
"To all intents and purposes it looks as if Janet Yellen is now a shoo-in for the top job, something that will keep traders in a better mood in the long winter months of tapering that probably lie ahead," said IG market analyst Chris Beauchamp.
The Fed meets from Sept 17-18 this week, with many expecting it to use the meeting to start to scale back or "taper" its quantitative easing programme.
According to a Reuters poll of 69 economists, a $10 billion reduction in the Fed's programme is expected, down from a $15 billion median prediction in an August poll.
Terry Torrison, managing director at Monaco-based McLaren Securities, said there was a chance the FTSE 100 could retreat in the run-up to the Fed meeting but added he was betting on further gains with "long" positions on the index.
"In the very short-term, I'm sitting on the fence, but going forward, I'd still prefer to be 'long' and look to buy on weakness," he said. (Additional reporting by David Brett)
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