* FTSE 100 up 0.1 pct
* Financials give biggest boost to index
* Barclays seen key UK winner from regulation easing
By Toni Vorobyova
LONDON, Jan 13 Britain's FTSE 100 share index
edged up towards two-month highs on Monday, supported by a rally
in heavyweight financials after regulators agreed to ease a new
rule on how banks' leverage ratios are calculated.
The regulators agreed on Sunday that banks will be able to
include derivatives on a net rather than the much bigger gross
basis when calculating leverage ratios under Basel III.
The easing should help keep the global economy financed as
it means banks will not have an incentive to ditch some types of
assets, such as loans to companies, in order to meet the
Financials - which are the second biggest sector in the FTSE
100 - added 9.38 points to Britain's blue-chip share index.
"It's all about the banks. The relaxing of the regulations
is really improving investor sentiment in the sector," said
Jonathan Roy, a broker at London Stone Securities.
Barclays rose 2.2 percent, Royal Bank of Scotland
was up 1.8 percent and Lloyds up 1.7 percent.
"This change in guidance around the leverage ratio
calculation is likely to be most beneficial for investment
banks, in our view, and hence of the quoted UK banks we would
expect Barclays' shares to react most positively to this news,"
Gary Greenwood, analyst at Shore Capital, said in a note.
The FTSE 100 was up 7.70 points, or 0.1 percent, at 6,747.64
points by 0835 GMT, edging back towards a two-month
intra-day high of 6,769.94 points hit on Friday.
Wm Morrison rose 3.7 percent after media reports
that, following weaker than expected Christmas sales, the grocer
was under pressure from shareholders to sell off some of its
Broader gains were capped by weakness in the FTSE 100's
biggest sector - energy - as crude prices fell after an
international deal on Iran's nuclear programme. The deal could
eventually pave the way for a lifting of sanctions, bringing
Iranian oil back onto the global market.
Oil major BP was down 0.6 percent, also impacted buy
a target price cut from analysts at Barclays.