FTSE ticks up as banks offset weak Vodafone, oils
* Banks top-weighted gainers as FTSE gains 0.2 pct
* BAE Systems gains on Goldman note
* UK GDP contracts more than previously thought in Q3
By Dominic Lau
LONDON, Dec 23 (Reuters) - Britain's top share index inched up 0.2 percent on Tuesday, with banks offsetting losses in Vodafone (VOD.L) and oil producers, though volumes were light on the last full trading day before Christmas.
The FTSE 100 .FTSE closed 6.82 points higher at 4,255.98, after rising as high as 4,307.09. The UK benchmark has fallen 34 percent this year on concerns of a deep and painful global recession, triggered by a meltdown in risky U.S. subprime mortgages.
Activity was light, with just over 578 million shares changing hands. That compared with Monday's 767 million and last week's daily average of 1.12 billion.
"Who knows what the new year holds but I think there is a bit of confidence coming back to the market," said Mark Foulds, a senior trader at ETX Capital.
The UK market will end trading on Wednesday at 1230 GMT and will remain close until Dec. 29.
Banks were the top-weighted gainers, with HSBC (HSBA.L), Standard Chartered (STAN.L), Barclays (BARC.L), Lloyds TSB (LLOY.L) and Royal Bank of Scotland (RBS.L) up between 0.2 and 4.6 percent.
Britain edged closer to recession in the third quarter, with the economy contracting by more than previously thought and at its sharpest rate since the early 1990s. [ID:nLN438486]
The number of mortgages approved for home purchase in Britain slumped to a fresh record low in November, with the seasonally-adjusted number falling to 17,773 -- almost 61 percent down on the same time last year. [ID:nLN393684]
Deutsche Bank said in a note that it forecast UK house prices falling by a total of 35 percent from peak to trough, which it expected at the end of 2010.
Across the Atlantic, the U.S. economy shrank at a 0.5 percent annual pace in the third quarter as expected.
