* FTSE 100 index rises 0.6 percent
* Banks, energy stocks among top risers
* Aberdeen jumps 6.6 percent on strong inflow
By Atul Prakash
LONDON, March 25 Britain's top share index rose
in early trading on Monday, with banking stocks in demand as
investors welcomed a 10 billion euro bailout deal for Cyprus
that staved off the collapse of its lenders.
At 0855 GMT, the FTSE 100 index was 40.12 points
higher, or 0.6 percent, at 6,433.88. It fell 1.5 percent last
week in its biggest weekly drop since November.
The index had fallen in five of the previous six sessions
and touched a two-week low on concerns that Cyprus might be
forced out of the euro zone, taking the region's debt crisis
into uncharted waters.
In a deal agreed overnight with international lenders, the
island will shut down its second largest bank, Popular Bank of
Cyprus, and inflict heavy losses on uninsured
"It's certainly something that investors can now put to bed
as it's been a drag on the indices for the past week," Angus
Campbell, head of market analysis at Capital Spreads, said.
"With a shortened week though, both this one and next we
might not see a sudden rush back into equities until things
normalise completely after Easter."
Bank shares were in demand in London, with Barclays
, Lloyds Banking Group and Royal Bank of
Scotland rising 1.4 to 2.0 percent.
Energy shares were supported by a rise in crude oil prices.
Royal Dutch Shell, Tullow Oil and BG Group
up 0.3 to 1.4 percent.
Cyclical sectors - which tend to track economic developments
- regained ground, but some analysts said equity investors
should tread cautiously.
"Clearly risk assets are going to stage a partial rebound,
although we're not quite sure that this is the end of it given
that the terms for depositors of more than 100,000 euros in
Cyprus are significantly worse than before," Jeremy
Batstone-Carr, head of private client research at Charles
"More generally, we see the recent release of European PMI
data as reflecting continued lack of enthusiasm for
cyclicals. Europe is still in recession even if Cyprus does end
up being resolved and with earnings expectations still falling,
we're sticking with our quality defensives strategy."
According to the bailout deal, deposits above 100,000 euros
in Popular Bank of Cyprus and Bank of Cyprus
will be frozen and used to resolve Popular Bank of Cyprus's
debts and recapitalise Bank of Cyprus.
A recent rally in stocks, before the sell-off on Cyprus
concerns, prompted clients of Aberdeen Asset Management
to pull in 3.5 billion pounds ($5.3 billion) of net new money in
the first two months of the year. Aberdeen surged 6.6 percent to
top the gainers list on the FTSE 100 index.
Fund manager Schroders, the second-biggest gainer on
the index, was up 2.9 percent. The company said it would pay 424
million pounds ($646 million) to buy Cazenove Capital in an
Vodafone rose 2.5 percent on renewed speculation the
telecoms firm could be working towards either selling its 45
percent stake in Verizon Wireless in the United States, or
merging with the Wireless unit's co-parent Verizon.
(Editing by John Stonestreet)