FTSE stays flat early as oils offset banks, miners

LONDON, May 7 (Reuters) - Britain's FTSE 100 .FTSE index
stayed flat early on Wednesday as firmer crude prices propelled
oil shares higher, offsetting weaker banks and miners.

By 0740 GMT, the FTSE 100 .FTSE was up 0.7 points at
6,215.9, after ending the previous session flat.

Strong crude prices CLc1 helped pump heavyweight oil and
gas shares higher, with BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz)
and BG Group (BG.L: Quote, Profile, Research, Stock Buzz) up between 0.2 and 0.5 percent.

Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) advanced 1.7 percent to top the FTSE
100 gainers after index provider MSCI Barra added the stock to
its MSCI World Index .MIWD00000PUS.

But miners tracked metal prices lower, with BHP Billiton
(BLT.L: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz), Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz),
Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Vedanta Resources and
Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz) all down. Antofagasta also traded without
the rights to dividend.

"We have now got an eye on our economy and what the interest
rate decision is going to be given the ongoing inflationary
pressures, especially from oil," said Richard Hunter, head of UK
equities at Hargreaves Lansdown.

"There is nothing to suggest that we are out of the woods
yet. But clearly it's going to be a question over the next
couple of weeks at least of looking out for a positive catalyst
to see if the FTSE can start another run."

The Bank of England begins a two-day meeting on Wednesday
and will announce its interest-rate verdict at 1100 GMT on
Thursday.

Banks remained under pressure despite Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz),
the largest U.S. home finance company, saying the worst of the
credit market turmoil erupting from the real estate slowdown may
be over.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) dipped 0.8 percent, Royal Bank of Scotland
(RBS.L: Quote, Profile, Research, Stock Buzz) fell 1 percent, HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) slipped 0.4 percent and
Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) lost 1 percent.

Investors will also keep a keen eye on U.S. pending home
sales data for March from the National Association of Realtors
due at 1400 GMT.

British American Tobacco (BATS.L: Quote, Profile, Research, Stock Buzz) climbed 2.5 percent after
the world's second-biggest cigarette maker posted a 17 percent
rise in first-quarter earnings, boosted by a weak pound, and
said 2008 had got off to a great start. [ID:nL07615168]

Rival Imperial Tobacco (IMT.L: Quote, Profile, Research, Stock Buzz) strengthened 1.5 percent.

International Power (IPR.L: Quote, Profile, Research, Stock Buzz) shed 3.5 percent to top the
losers' list on the FTSE 100. The company said it would issue a
bond to raise around 500 million euros ($774 million), and said
trading for the year was in line with expectations.

AstraZeneca (AZN.L: Quote, Profile, Research, Stock Buzz) was up 1 percent after its chief
executive said sales trends for its ulcer pill Nexium had been
"consistent" since the company said rising competition from
generics had hurt sales of that treatment.

The company also said Teva Pharmaceutical Industries Ltd
(TEVA.O: Quote, Profile, Research, Stock Buzz) had sued the company, asking for a declaratory judgment
on remaining Nexium patents.

Liberty International (LII.L: Quote, Profile, Research, Stock Buzz) eased 1.7 percent after the
property company said its net asset value per share fell to
1,181 pence in the quarter ended March, from 1,264 pence,
reflecting unsettled UK property market conditions.

The stock also traded without the rights to a dividend.

Bunzl (BNZL.L: Quote, Profile, Research, Stock Buzz), Old Mutual (OML.L: Quote, Profile, Research, Stock Buzz), Rexam (REX.L: Quote, Profile, Research, Stock Buzz) and
Whitbread (WTB.L: Quote, Profile, Research, Stock Buzz) also fell after going ex-dividend.
(Editing by David Hulmes)