By Tricia Wright LONDON, May 10 (Reuters) - Strong banks propelled Britain's top share index sharply higher by midday on Monday as investors welcomed an emergency rescue package worth about $1 trillion to help alleviate the euro zone debt crisis Miners were also firm. At 1133 GMT, the FTSE 100 was up 275.02 points, or 5.3 percent at 5,398.01, and is heading for its biggest one-day percentage gain since Dec. 8 2008, after it fell 7.7 percent last week. "It (the rescue package) ... demonstrates a very determined response to dealing with what needs to be addressed," said Mike Lenhoff, chief strategist at Brewin Dolphin. "The thing to remember is that these markets were very oversold -- we had nothing but constant selling for a while and these markets were just gripped by hysteria, and now it seems that the hysteria's going the other way." Banks were the standout gainers on the FTSE 100, with Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered jumping 8 to 14.9 percent. The rescue deal, hammered out by European Union finance ministers, central bankers and the International Monetary Fund in talks at the weekend, was the largest package in over two years since G20 leaders threw money at the global economy following the collapse of Lehman Brothers. Insurers were also in favour. Aviva, due to issue a trading update on Tuesday, rose 10.4 percent, with Legal & General, Old Mutual, Standard Life and the UK's Prudential adding 2.8 to 8.2 percent. Prudential has made progress in make-or-break talks with UK regulators over its acquisition of AIG's Asian arm, and is close to announcing a deal, sources familiar with the matter said. Mining stocks also saw good demand as the rescue plan lifted sentiment across markets and metals prices firmed, with Kazakhmys, Eurasian Natural Resources, Xstrata and BHP Billiton up 6.7 to 9.6 percent. Vedanta Resources climbed 10.7 percent after the India-focused mining group bought Anglo American's zinc assets for $1.34 billion to boost its exposure to the metal. Anglo American's shares put on 8.7 percent. Lonmin added 5.6 percent. The world's third biggest platinum producer swung to a first-half profit after metal prices rebounded and costs fell, overshadowing a plan to issue shares to help fund a business in South Africa. ENERGY BOOST Integrated oil stocks were boosted by a rebound in crude prices. Royal Dutch Shell rose 4 percent, while BG Group, up 4.9 percent, was also aided by upgrades from both UBS and ING. BG is to pay $950 million to buy a 50 percent stake in shale gas assets in Appalachia from EXCO. BP, however, was the lone FTSE 100 faller, dropping 0.3 percent after saying the oil spill in the Gulf of Mexico has cost it $350 million so far, suggesting a run rate of cash far higher than some analysts had predicted. Among individual movers, Centrica put on 4.6 percent after the British utility said its earnings outlook for 2010 remained positive, with its British Gas unit expected to have a strong first half thanks to growing customer numbers and a colder than usual winter. The Bank of England kept interest rates at 0.5 percent and made no change to its asset purchase target, keeping in place stimulus measures designed to nurse the economy back to health. Investors will closely watch the latest developments in the British political landscape after Thursday's election delivered an inconclusive result. (Editing by David Cowell) Keywords: MARKETS BRITAIN STOCKS (email@example.com; +44 207 542 8114; Reuters Messaging:firstname.lastname@example.org) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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