Finance & Stock Market News

By David Brett

LONDON, Dec 1 (Reuters) - Britain's top share index was up

1.7 percent at midday on Tuesday, with banks and miners topping

the leader board as concerns abated over Dubai's debt problems.

By 1220 GMT the FTSE 100 index was up 90.04 points at

5280.72, having fallen by 55.05 points or 1.1 percent on Monday

to end at its lowest closing level for three weeks.

The blue chip index posted its biggest one-day percentage

fall in eight months last Thursday after Dubai sought a debt

standstill for state-owned conglomerate Dubai World.

Overnight on Monday Dubai World unveiled plans to

restructure about $26 billion in debt out of the estimated total

of $59 billion which it owes, reassuring investors that the

emirate's debt problems can be contained.

'We're seeing a continuing recovery from that (the Dubai

World worries) and also with the year-end in mind there's a

certain amount of window dressing going on,' said Angus

Campbell, head of sales at Capital Spreads..

'Had the U.S. and Middle Eastern markets been open last week

then the reaction wouldn't have been quite so severe,' Campbell

added.

Banks were the biggest gainers as recent worries over their

exposure to Dubai's debts eased, with Royal Bank of Scotland , HSBC, Barclays and Standard Chartered gaining 2 to 4.2 percent.

Lloyds Banking Group missed out, losing 1.3 percent

as KBW slashed its target price to 65 pence from 105 pence, as

the bank pushed ahead with its record rights issue, which was

priced last week at 37 pence a share to raise 13.5 billion

pounds..

Miners were bolstered by stronger metal prices as the dollar

weakened with investors unwinding moves into the safety of the

U.S. currency made on Dubai concerns.

Eurasian Natural Resources was up 4.6 percent

bolstered as well by news of the stock's inclusion on BofA

Merrill Lynch's influential Europe 1 list and by a Credit Suisse

upgrade to 'outperform' on Monday.

Xstrata, Rio Tinto, BHP Billiton,

Fresnillo, Vedanta Resources, and Anglo

American climbed 1.7 to 5.4 percent higher.

The shareholders of diamond miner De Beers, including 45

percent owner Anglo American, have agreed in principle to a

rights issue to reduce the firm's debt.

Oil majors added their support as crude prices firmed

as well, with BP, BG Group, and Royal Dutch Shell up 1.1 to 2 percent.



PROPERTY FIRMS EYED

Hammerson rose 3.5 percent as Morgan Stanley

resumed coverage of the property firm with an 'overweight'

stance.

The broker said the market undervalues the company's UK

development prospects. Within the sector, British Land,

Land Securities Group, Liberty International

and Segro added between 2.3 and 4.1 percent.

Mid cap housebuilder Persimmon gained 6.4 percent as

Arbuthnot upped its rating on the company to 'buy' from

'neutral' on valuation grounds.

Other mid cap performers included pubs operator Greene King up 5.4 percent after strong first-half results, with KBC

Peel Hunt prompted to raise its rating to 'buy' from 'hold'.

Fallers were in short supply on the main index. TUI Travel shed 1.3 percent after its in-line full-year results

failed to live up to high market expectations after a strong run

by the stock ahead of the numbers.

Peer Thomas Cook also fell 1.3 percent.

Economic data showed British manufacturing activity grew

more slowly than expected in November and there were signs that

the sector's fledgling recovery might have lost some pace.

British house prices rose 0.5 percent in November, the same

as in October, suggesting that a rapid initial rebound from the

five-year low set in February is now slowing, mortgage lender

Nationwide said on Tuesday.

Later in the session U.S. November ISM Manufacturing data

and October Pending Home Sales numbers are due out.

(Editing by Greg Mahlich)

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(david.brett@thomsonreuters.com; +44 207 542 8099; Reuters Messaging:david.brett.reuters.com@reuters.net)

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