* Unilever, Royal Mail to cut jobs
* Pub operator Marston's gains despite lower sales
* FTSE 100 up 1.0%, FTSE 250 adds 0.9%
(Updates to market close)
By Shashank Nayar and Ambar Warrick
Jan 25 (Reuters) - London's FTSE 100 rebounded on Tuesday
from a one-month low hit a day earlier, supported by major bank
stocks as expectations of tighter monetary policy drove up bond
yields.
The blue-chip FTSE 100 index gained 1.0%, with
lenders HSBC and Lloyds Banking Group among
the top boosts.
Heavyweight oil stocks also rose as concerns of a military
conflict in Ukraine and risks in the Middle East buoyed crude
prices with the prospect of supply disruptions.
The domestically-focussed midcap index rose 0.9%
after closing at a near 10-month low on Monday.
Market participants were cautious ahead of the outcome of
the Federal Reserve policy meeting on Wednesday, expecting a
hawkish stance from policymakers.
Expectations are also high that the Bank of England will
increase rates for the second time in less than two months at
its policy meeting next week.
"Global equity markets have retraced sharply recently amid
worries about a looming Fed lift-off and tensions around
Ukraine," Thomas Hempell, Head of Macro & Market Research,
Generali Investments wrote in a note.
"An escalation of the conflict and subsequent sanctions by
the West may add to worries about energy supply for Europe,
adding to virulent inflation uncertainties."
The FTSE 100 has outperformed its peers in developed markets
this year, supported by its attractive valuations and gains in
heavyweight energy and banking shares.
UK markets offer a good hedge in the event of a multiple
compression driven by rising rates, with equities offering the
best valuation cushions and the highest dividend yields among
key markets, analysts at JP Morgan said in a note.
Among individual stocks, Royal Mail rose 1.3% after
it said it will lay off around 700 managers as part of cost
cutting efforts aimed at transforming the centuries-old postal
company.
Unilever slipped 0.2% after the consumer products
maker unveiled plans to cut about 1,500 management
jobs.
(Reporting by Shashank Nayar in Bengaluru; Editing by
Subhranshu Sahu, William Maclean)