BT, Cadbury lift FTSE, but Barclays hits banks

By Rebekah Curtis

LONDON, May 15 (Reuters) - Britain's top shares index rose by midday on Thursday, as results boosted BT (BT.L: Quote, Profile, Research, Stock Buzz) and Cadbury (CBRY.L: Quote, Profile, Research, Stock Buzz), but banks capped gains after Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) refused to rule out a rights issue after posting a $2 billion writedown.

BT contributed most points to the index, gaining 3.7 percent after the telecoms operator posted a rise in fourth-quarter underlying core earnings, in line with forecasts, and said it expected to deliver continued growth next year. [ID:nL15241021]

Cadbury rose 5 percent after the confectionery company said it expected strong first-half performance. The stock also benefited from upbeat broker notes from Numis and Panmure.

By 1109 GMT, the FTSE 100 .FTSE reversed earlier losses to rise 10.6 points, or 0.2 percent, to 6,226.6 as the broader European stock market traded flat.

Leading the losers' list, Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) shed 3.4 percent after saying profits fell in the first quarter after it took a 1 billion pound writedown on assets tarnished by the credit crunch, but it did not disclose the extent of its profit fall.

The bank also refused to rule out a rights issue. [ID:nL15355889] [ID:nWLB1645]

HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) and Alliance & Leicester (ALLL.L: Quote, Profile, Research, Stock Buzz) lost between 1.2 and 2 percent. Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), trading ex-rights, edged up.

"(The sector's) going to be a bit of a burden for the market for some while. We have to resign ourselves to the fact that that's one sector that we can't expect very much from," Mike Lenhoff, chief strategist at Brewin Dolphin, said.