* FTSE 100 edges up 0.1 pct, steadies near 2-month highs
* IAG rises after swinging back to profit
* RBS falls as H1 earnings disappoint some traders
By Sudip Kar-Gupta
LONDON, Aug 2 Britain's benchmark equity index
steadied near two-month highs on Friday, buoyed by signs of an
improvement in the global economy and higher profits at airline
Part-nationalised Royal Bank of Scotland fell,
however, acting as one of the biggest drags on the market after
its interim earnings disappointed several traders. IAG and RBS
were the most heavily traded FTSE 100 stocks in terms of volume.
The benchmark FTSE 100 equity index edged up by 0.1
percent, or 4.46 points, at 6,686.44 points in early trading,
steadying near two-month highs reached earlier this week.
The index has risen some 11 percent from lows of around
6,000 points reached at the start of June, boosted by signs of a
slow recovery in the UK and European economies, and the FTSE 100
remains up by around 13 percent since the start of 2013.
Global equity markets have also rallied from their June lows
due to expectations that any scaling back in economic stimulus
measures by the U.S. Federal Reserve will be slow and gradual,
which should continue to support stock markets.
"It seems investors' confidence has come back to the markets
this week," said Spreadex trader Lee Mumford.
Airline IAG topped the FTSE leaderboard with a 3 percent
rise after it swung back to a second quarter profit after making
a loss a year ago.
RBS fell 4.3 percent as its first-half earnings underwhelmed
some traders, although investors welcomed its appointment of
Ross McEwan as new chief executive.
"Headline numbers damp with operating profit and total
revenues deteriorating in the period. Worryingly, the bank's
trading division performed very poorly with operating profit and
revenues declining rapidly," said Joe Rundle, head of trading at
Markets were also awaiting U.S. employment data later.
U.S. employers probably hired enough workers in July to push
the jobless rate to a near four-year low, which could bolster
expectations the Federal Reserve will start drawing down its
huge economic stimulus programme later this year.
(Editing by Catherine Evans)