* UK blue chip index up 0.5 pct
* Financials give biggest boost to FTSE
* Oil price bounce lifts energy shares
* Investors await BoE report on Tuesday
* Midcap Capita surges after unit sale
MILAN, June 26 (Reuters) - British shares rose on Monday, snapping four straight days of losses, as banks joined a broader European rally and a bounce in crude oil prices which buoyed energy firms.
The blue chip FTSE index added 0.5 percent, while mid caps added 0.4 percent.
Financials provided the biggest boost to the FTSE, adding 13 points to the index, with heavyweight banks HSBC and Barclays up 0.8 and 1.8 percent respectively.
Banking stocks were in demand in Europe after a deal to wind up two failed Italian regional lenders.
Oil majors BP and Royal Dutch Shell both rose more than 0.7 percent as oil prices rose, helped by a weaker dollar, although some investors remained bearish amid a global supply glut. "Gains in energy sector remain fragile as oil prices remain relatively soft compared to last month's levels," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
She said investors were also awaiting for the Bank of England (BoE) Financial Stability Report and Governor Mark Carney's speech on Tuesday for possible clues on any possible hike in interest rates as inflationary pressures rise.
Among big single stock movers was midcap outsourcer Capita . Its shares rose 2.8 percent after agreeing to sell its asset management services arm in a 888 million pounds deal that Jefferies said should help subside balance sheet concerns. Back on the FTSE, subprime lender Provident Financial fell more than 2 percent as RBC downgraded the stock to "Sector Perform" from "Outperform" following last week's profit warning.
On the upside were Nestle rivals Unilever and Diageo as the sector was lifted after an activist investor Activist investor Daniel Loeb's Third Point urged the Swiss food giant to improve its margins, buy back stock and sell non-core assets.
Top losers were also precious metal miners Fresnillo and Randgold declined 2.7 and 2.2 percent respectively after gold prices fell as investors remained cautious ahead of a flurry of U.S. data due this week. (Reporting by Danilo Masoni; Editing by Angus MacSwan and Raissa Kasolowsky)