FTSE up 0.8 pct; commods, financials rally

* Commodity stocks up on higher oil, metals prices

* Insurers up after Prudential H1

* Banks extend Wednesday's gains

* Defensives fall as investors favour riskier assets

By Tricia Wright

LONDON, Aug 13 (Reuters) - Britain's top share index rose early on Thursday, amid widespread relief after the U.S. Federal Reserve said it saw signs of a stabilising economy, with commodities and financials the biggest blue-chip gainers.

By 0807 GMT, the FTSE 100 .FTSE was 37.60 points, or 0.8 percent higher, at 4,754.36, after closing 45.42 points or 1 percent higher on Wednesday at 4,716.76.

The Federal Reserve said the economy was levelling out, and it left interest rates unchanged at the end of its two-day policy meeting.

The Fed also said it will extend the duration but not the size of a program to buy long-term government debt, which is part of its effort to revive credit and stimulate the economy. [ID:nN1272730].

Positive signals also came from Europe on Thursday, with data showing German gross domestic product rose in the second quarter. [ID:nLD74996]

"I think the market was reassured really by what we heard from the central banks yesterday, and that's why there's a level of confidence for investors to continue their recent appetite for risk," said Henk Potts, a strategist at Barclays Wealth.

"From a macro perspective investors can appreciate two things: that central banks will be supportive, and that the extraordinary efforts central banks have gone to to fight their way out of recession is showing tangible signs of working," he said.

Mining stocks added the most points to the FTSE 100 index, rallying against a background of firmer metals prices.

Lonmin (LMI.L), Rio Tinto (RIO.L), Kazakhmys (KAZ.L) and Xstrata (XTA.L) put on between 3.3 and 4.2 percent.

Energy stocks were also in favour, as oil CLc1 rose towards $71 a barrel on renewed optimism that the U.S. economy was through the worst of the recession which offset bearish U.S. inventory data showing continued weak demand.

BG Group (BG.L), Royal Dutch Shell (RDSa.L) and BP (BP.L) added 0.5-1 percent.