FTSE rises 1.5 pct by midday on banks, Vodafone

Britain's top share index rose 1.5% by midday on Wednesday as Vodafone gained after announcing a share buyback programme, while lower oil prices eased inflation fears, lifting banking stocks.
By 1032 GMT, the FTSE 100 was up 78.6 points at 5,442.7, after losing 0.7% on Tuesday.
Index heavyweight Vodafone advanced 2.5%, recovering some of the previous session's steep losses, after the mobile phone giant announced a surprise 1 bln-pound ($2 bln) share buyback programme.
Vodafone shares slumped almost 14% on Tuesday after the group said its full-year revenue would be at the bottom of a previously stated forecast.
Oil shares slipped as crude prices fell. BP, Royal Dutch Shell, gas producer BG Group and Tullow Oil shed 0.2 to 0.7%.
Banks were the biggest sectoral gainer, with HBOS soaring more than 10% onmarket talk of bid interest from Spanish rival BBVA, traders said.
Both HBOS and BBVA declined to comment.
Barclays, HSBC, HBOS, Lloyds TSB, Royal Bank of Scotland and Standard Chartered were up 3.2 to 8.3%.
"The consensus position is to long energy and short financials … Financials have seen such a massive de-rating. If we start to see the oil price comes off, the temptation to switch those two becomes much greater," said UBS strategist Gareth Evans.
The Bank of England's minutes of the July 9-10 policy meeting showed one policymaker wanted to raise interest rates another wanted a cut, but the remaining seven chose to keep them steady as both the inflation and economic growth outlook had deteriorated.