London shares open up after Wall St, Asia rally; RBoS up on disposal talk UPDATE

LONDON (Thomson Financial) - Leading shares got off to a higher start ahead of the bank holiday weekend following rallies on Wall Street and in Asian markets, with Royal Bank of Scotland up on reports of private equity interest in the bank's insurance arm. At 8:50 a.m., the FTSE 100 index was 58.2 points higher at 6,145.5 after closing unchanged at 6,087.3 Thursday, while the FTSE 250 index gained 158.2 points to 10,231.2. Overnight, Wall Street shot higher to close above 13,000 for the first time since Jan. 3 as investors viewed the rising dollar and falling oil prices as promising signs for the economy. The Dow Jones Industrial Average closed 189.9 points higher at 13,010.00, while the S&P 500 index took on 23.75 to end at 1,409.34 and the Nasdaq Composite index jumped 67.91 to 2,480.71. Asian markets were also buoyant Friday, with the Nikkei 225 index closing up 282.40 points at 14,049.26 and the Hang Seng index finishing its morning session 493.25 points higher at 26,248.60. World oil prices continued lower in Asian trade after the U.S. dollar strengthened to its highest level since late March. New York's main oil futures contract, light sweet crude for June delivery, slipped 57 cents to $111.95 per barrel, causing UK-listed oil stocks to underperform in early deals, with BP unchanged at 605 pence and Royal Dutch Shell down 6 pence at 1,995. Elsewhere in London, Royal Bank of Scotland shares received a fillip, up 11 pence at 357, following reports private equity investor Texas Pacific Group is poised to bid for the bank's 8 billion pound insurance arm, according to the Daily Telegraph. TPG is particularly keen on RBS's Churchill and Direct Line insurance brands, but is mulling an offer for the entire business, the newspaper said, citing a source. Other banks also enjoyed the talk, with HBOS up 14-3/4 pence at 479-3/4, Lloyds TSB 10-3/4 higher at 441-1/2 and Barclays firming 8-1/2 at 473-1/2, the latter shrugging off a press report that Paul Idzik, chief operating officer, is to step down in a sign of a rift at the top of the United Kingdom's third largest bank, according to the Financial Times. The top Footsie performer, however, was Wolseley, spurred on by optimism over the state of the U.S. economy, where fears surrounding the housing market have hit the building and plumbing supplies group's shares. Wolseley was up 23 pence at 523 early on. Among broker changes, Whitbread was boosted 41 pence to 1,260, thanks to Citigroup upgrading the leisure group to 'buy' from 'hold'. The broker said it thinks the stock has been 'over penalised' for its UK consumer exposure. Cadbury Schweppes began trading in London solely as confectionery group Cadbury Friday morning following the demerger of its drinks business. In early deals the stock was changing hands at 631-1/2 pence. Deutsche Bank, which has a 'hold' recommendation on the stock, said it expects the shares to trade around 630 pence per share, with every $1 move in the price of Dr Pepper Snapple -- to be listed in New York on May 7 -- to vary the Cadbury price by approximately 10 pence. Only a handful of blue-chips featured on the downside, led by Carnival, which lost 15 pence at 2,014, as SG Securities cut its recommendation on the cruise operator to 'sell' from 'buy' and lowered its target price to $32 from $53, on worries about a deterioration in U.S. consumer confidence. International Power slipped 0-1/4 pence at 441-1/4, Scottish & Southern Energy dipped 1 penny at 1,404, and National Grid was unchanged at 710, as investors shunned defensives. On the second line, a number of broker changes helped several mid-cap plays, with Intertek Group up 45 pence at 1,007 as Goldman Sachs upgraded its recommendation to 'buy' from 'neutral' and lifted its target to 1,203 pence from 1,066. The broker said it believes Intertek's share price has been weighed down by concerns about the cyclicality of its exposures. Wellstream also benefited from bullish comment, with Credit Suisse upgrading the stock to 'outperform' from 'neutral' following recent share price weakness -- sending the shares 46 pence firmer to 1,290. After plummeting over 20 percent Thursday after announcing a swing to first quarter pretax losses and issuing a weak outlook, shares in CSR clawed back 13-3/4 pence to 337-3/4 Friday, despite Credit Suisse downgrading them to 'neutral' from 'outperform'. Rentokil Initial was another riser, albeit only 1 penny ahead at 95-1/2, after announcing profits dropped in the first quarter after being hit by the continuing problems at its parcel delivery service City Link, and also saying its full-year 2008 dividend payment will be cut. But Seymour Pierce said there are two ways to interpret this update: either things are so bad that they cannot get any worse and there is operational upside, or the group requires radical restructuring. It added that either way it should be good for shareholders and upped its recommendation to 'buy' from 'hold'. On the economic front Friday, UK investors await the construction purchasing managers' index from CIPS, which is expected to show a small retreat to 47.0 from 47.2. In the United States a further decline in jobs is expected, with analysts forecasting a loss of 75,000 jobs in April, following a loss of 80,000 in the previous month. The unemployment rate in April is expected to increase to 5.2 pct from 5.1 pct in the previous month. Factory orders in March are expected to have increased 0.3 percent following a 1.3 percent decline in the previous month. Excluding transportation, factory orders are expected to have increased 2.0 percent following a 1.8 percent decline in the previous month.