Financials lift FTSE 0.6 pct; oils in demand

* Banks rally from Friday’s falls

* Oils higher; Cairn Energy secures rig in Greenland

* London Stock Exchange buys stake in Turquoise

LONDON, Dec 21 (Reuters) - Britain’s leading share index rose 0.6 percent in early trade on Monday buoyed by strong finishes in the U.S. and Asia, as banks rebounded from Friday’s falls, while heavyweight oils also found support.

At 0907 GMT, the FTSE 100 index .FTSE was up 32.22 points at 5,229.03, after losing 0.4 percent on Friday and 1.2 percent for the week.

“There’s an element of investors’ buying on the falls but there’s also a touch of re-jigging given that Wall street closed higher on Friday,” said Keith Bowman, analyst at Hargreaves Lansdown.

U.S. stocks rose on Friday as quarterly results from Oracle and Research In Motion lifted the Nasdaq more than 1 percent, and Asian markets rose broadly on Monday also led higher by high-tech stocks.

Investors took the opportunity to buy on the dip homing in on financials as they recovered the previous session’s losses.

Banks Royal Bank of Scotland RBS.L, Barclays BARC.L, Lloyds Banking Group LLOY.L, HSBC HSBA.L and Standard Chartered STAN.L added 1.1 to 1.9 percent.

It was a similar story for the life insurers, which were weaker on Friday. Prudential PRU.L rose 1.6 percent, while Old Mutual OML.L and Standard Life SL.L added 1.6 and 0.5 percent respectively.

Among individual risers, London Stock Exchange LSE.L climbed 1 percent after it took a 60 percent stake in loss-making trading platform rival Turquoise and said it will merge it with its own "dark pool" platform, Baikal, to create a new pan-Europe venture. [ID:nLDE5BK073]


Energy shares were also in demand as the dollar fell from recent highs against the euro and with crude CLc1 holding above $73 a barrel.

Cairn Energy CNE.L was the biggest blue chip riser, up 2.7 percent, after announcing it has secured a rig to allow it to commence a drilling programme in the Disko West area, offshore Western Greenland in H2 2010. RBS said the company had delivered an "early Christmas present" to its shareholders.

Tullow Oil TLW.L gained 1.5 percent after the Financial Times reported one of its senior executives revealed the explorer is likely to scupper Heritage Oil's HOIL.L proposed 930 million pounds sale of its Ugandan assets to energy group ENI EN.MI.

Royal Dutch Shell RDSa.L, BG Group BG.L and BP BP.L were up 0.4 to 0.7 percent.

On the economic news front, Britain faces a long road to recovery and growth will be modest in 2010, but that will not prevent the Bank of England from raising interest rates early next year, according to the Confederation of British Industry’s latest quarterly economic forecast. [ID:nLDE5BH1DB]

No important domestic economic data is due for release on Monday, although investors will be looking towards Tuesday’s release of the final reading for UK third-quarter GDP.

“There’s a conflict within the market with worries over sovereign debt battling corporate earnings, where we have seen stronger performances in recent days,” Hargreaves Lansdown’s Bowman said.

The FTSE has rebounded over 50 percent since six-year lows in March, but remains 3.9 percent lower than levels seen before the collapse of Lehman Brothers Bank in September 2008.

As investors' appetite for risk returned, defensive stocks edged into negative territory. Utility groups were the biggest losers, with Centrica CNA.L, National Grid CNA.L, Severn Trent SVT.L and United Utilities UU.L off 0.4 to 1.2 percent.

Home Retail Group HOME.L fell 0.5 percent, extending the previous week's falls following weaker than expected British retail sales figures and on brokers' worries over pressure on its gross profit margins.

Aggreko AGGK.L, the temporary power provider, fell 1.3 percent on its first day's trading on the FTSE 100 index following promotion from the mid caps. Its shares hit an all-time on Friday after issuing a bullish trading update. (Editing by Mike Nesbit)