By Dominic Lau
LONDON, July 16 (Reuters) – Britain's top share index ticked up early on Wednesday after the previous session's steep losses, as oil stocks tracked higher crude prices and miners rebounded, but banks remained under pressure.
By 0748 GMT, the FTSE 100 was up 15 points, or 0.3 percent at 5,186.9 points after shedding 2.4 percent on Tuesday to hit its lowest close since October 2005. European shares also traded higher in early trade.
"With a low level of visibility and very poor sentiment ahead of the second quarter reporting season, nobody prepares to place any bets to the upside," said Jeremy Batstone-Carr, head of private client research at Charles Stanley.
Oil shares gained as crude prices traded above $139 a barrel. BP, Royal Dutch Shell, gas producer BG Group, Cairn Energy and Tullow Oil strengthened 0.6 to 0.9 percent.
Miners bounced after Tuesday's sharp falls, with BHP Billiton, Anglo American and Lonmin putting on between 0.5 and 1.1 percent.
Rio Tinto advanced 1.4 percent. The miner said second-quarter refined copper output tumbled 18 percent from the same period a year ago, facing lower yields at some operations, but production of iron ore rose 13 percent.
Banks remained weak, with Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS down between 1.3 and 2.3 percent. HSBC and Standard Chartered, however, ticked higher.
On Tuesday, U.S. securities regulators issued an emergency rule to limit certain types of short selling in major financial firms, including Fannie Mae and Freddie Mac.
UK jobs data due at 0830 GMT will provide further evidence on the health of the British economy. Investors will also look to U.S. consumer prices data for more clarity on the inflation situation in the world's largest economy.
ICAP UP, WOLSELEY DOWN
ICAP, the world's biggest interdealer broker, climbed 2.3 percent after it said group revenue grew by 15 percent in the first quarter and it expected year profit to be broadly in line with market expectations.
Wolseley shed 3.5 percent after the building materials distributor said trading profit for the last 11 months was down 28 percent and market conditions were likely to continue deteriorating.
Admiral Group topped the FTSE 100 gainers, up 5.5 percent after UBS issued an upbeat note on the car insurer.
British Energy rose 1 percent after the Daily Telegraph said a successful 11 billion-12.6 billion pound takeover of the UK firm by France's EDF appeared to move a step closer after British Energy drafted in an independent financial advisers to work on the deal.
London Stock Exchange, British Land, FirstGroup and Man Group all fell after going ex-dividend.
Credit Suisse raised UK stocks to 5 percent overweight from benchmark in its global portfolio, while continental Europe was 30 percent underweight.
"UK will have a recession but just 10 percent of the stock market is accounted for by domestic cyclicals," the broker said in a note. "Relative earnings momentum is second best of all regions. UK equities tend to outperform 70 percent of the time when global equities and lead indicators are weak."
