FTSE eases as weak banks offset oil, miner gains
* Banks weak on fundraising uncertainties
* Oils, miners up as commodity prices stabilise
* Friends Provident up on takeover deal
* International Power boosted by results
By David Brett
LONDON, Aug 11 (Reuters) - Britain's top share index slipped 0.1 percent by mid-session on Tuesday as weakness in banks offset gains in energy majors and miners, while insurer Friends Provident rose after agreeing a takeover offer.
By 1010 GMT, the FTSE 100 .FTSE was down 4.63 points to 4,717.57, easing back after hitting a 10-month closing high of 4,731.56 on Friday.
"With little doubt, the big story of the day so far has been Friends Provident's acceptance of the revised bid offer by Resolution, adding further weight to the arguments that a return to normality for financial markets remains on the cards," said Philip Gillet, sales trader at IG Index.
Friends Provident (FP.L) was 1.9 percent higher, after Resolution (RSL.L) announced a 1.86 billion pound takeover that valued the life insurer at a 6 percent premium to Monday's closing price. [ID:nLB614001]
Resolution lost 2.8 percent after the announcement.
Other life insurers shed Monday's gains as the rest of the sector saw profit takers move in. Old Mutual (OML.L) dropped 3 percent, Aviva (AV.L) was 2.4 percent lower and Prudential (PRU.L) lost 1.7 percent.
Banks were the biggest drag on blue chips, with Barclays (BARC.L), Lloyds Banking Group (LLOY.L), Royal Bank of Scotland (RBS.L) and HSBC (HSBA.L) falling between 0.8 and 6.1 percent.
"The financial sector in general is struggling, with Lloyds sitting around 5 percent lower as the spectre of a 15 billion rights issue continues to weigh," said Gillet.
The government is close to hammering out an agreement about how to insure loans granted to Royal Bank of Scotland and Lloyds Banking Group under its 580 billion pound asset protection scheme, the Guardian newspaper reported.
InterContinental Hotels (IHG.L) fell 1 percent as the world's biggest hotelier moved to cut costs further as it warned of tough trading through the rest of 2009 and reported a 38 percent drop in first-half profit. [ID:nLB610779] Continued...
