FTSE gains as miners, energy rebound

By Jon Hopkins

LONDON (Reuters) - The leading share index was up 1.1 percent by midday on Tuesday with gains from miners, oils and banks offsetting some weakness in defensive stocks as investors brushed off disappointing UK industrial output data.

By 11:28 a.m. the FTSE 100 .FTSE was up 39.62 points at 4,234.53, after falling 1 percent to a two-month low on Monday.

The index has gained 21.3 percent since hitting a six-year low in March but is still down 5.3 percent for the year.

"It is a reversal of fortune that is lifting the FTSE up today, with a bounce back by the mining sector helping to lift sentiment across the market," said Philip Gillet, a sales trader at spread better IG Index.

Miners added the most points to the blue-chip index, reversing Monday's losses against a backdrop of stabilising metals prices.

Kazakhmys (KAZ.L), Vedanta Resources (VED.L). Lonmin (LMI.L), Rio Tinto (RIO.L), Antofagasta (ANTO.L), Anglo American (AAL.L) and BHP Billiton (BLT.L) added 3.8-6.2 percent.

Oil shares also rallied as crude prices recovered slightly from recent falls, with BP (BP.L), BG Group (BG.L), Royal Dutch Shell (RDSa.L), Cairn Energy (CNE.L) and Tullow Oil (TLW.L) up 0.8 to 3.4 percent.

And banks rebounded from early falls, extending Monday's rally with Royal Bank of Scotland (RBS.L), Barclays (BARC.L), HSBC (HSBA.L) and Standard Chartered (STAN.L) adding 1.2-2.0 percent.

DEFENSIVES MIXED

Some defensive issues were also in demand as investors, still cautious after last week's disappointing non-farm payroll figures, switched into stocks perceived as resilient to economic weakness.

Drugmakers AstraZeneca (AZN.L) and Shire (SHP.L) found support, up 0.5 percent and 1.4 percent respectively.

Shire said on late on Monday that it has filed a treatment protocol for its Velaglucerase Alfa drug for Gaucher disease and is working with the U.S. Food & Drug Administration to file a new drug application for the treatment as early as possible.

Food retailers Tesco (TSCO.L) and Wm Morrison (MRW.L) put on 0.6 and 2 percent respectively.

Wm Morrison was supported by an upgrade in rating to "buy" from "neutral" by Bank of America-Merrill Lynch.

But food producers were weak, with AB Foods (ABF.L) the top blue chip faller, down 1.7 percent and Cadbury (CBRY.L) off 0.6 percent.