* FTSE nudges up 0.1 percent
* Energy shares gain, BP and Tullow rise
* European debt concern takes toll on banks
* U.S. retail sales eyed
By David Brett
LONDON, Nov 12 (Reuters) - Britain's top shares were higher at midday on Monday, led by commodities and as investors looked ahead to U.S. retail sales figures, although gains were muted with Europe's debt problems weighing on sentiment.
By 1212 GMT, the FTSE 100 was up 7.67 points, or 0.1 percent, at 5,804.54, bouncing off an intraday low of 5,755.68 and having closed down 0.3 percent at 5,796.87 on Friday.
The UK's blue-chip index reversed early losses as U.S. stock index futures pointed to a flat open on Wall Street on Monday, ahead of economic data.
"People are a bit tentative and the recovery is a long way from definite," Martin Dobson, head of sales trading at Westhouse Securities, said.
"The market has come a long way and there is a little caginess. Although there is money on the sidelines investors are a bit reluctant to put it in at this level."
Energy stocks were a source of support for the FTSE with BP up 1.5 percent. The oil major, which is in the process of raising $25 billion to $30 billion by the end of 2011 to help pay for its Gulf of Mexico oil spill, agreed to sell its Southern Africa forecourt network.
Tullow Oil was up 1.5 percent after Anadarko Petroleum Corp said its Mercury-1 oil exploration well located in the waters off the Sierra Leone coast, in which Tullow has a 10 percent stake, encountered oil.
Mid-cap firm Premier Oil rose 5.3 percent with traders citing an Observer newspaper report of a bid approach from Korea's KNOC.
IRELAND ANCHORS BANKS
Banks were lower with Europe's debt troubles weighing on the sector. Barclays and Standard Chartered shed 0.4 and 0.6 percent respectively.
An Irish minister reiterated on Monday a denial that Ireland was in direct discussions about a European Union bailout, but said "continuous talks" were taking place.
Meanwhile, pressure continues to mount on Portugal, the next high-deficit euro zone country in the market's crosshairs.
"What is clear to investors is there are real risks present in world markets, and the view that equities are the best place to seek a return is starting to wane," Phil Gillett, a trader at Spreadex, said.
Rolls-Royce dropped 1.6 percent, topping the list of FTSE 100 fallers as sector-negative sentiment following a second safety incident for airline Qantas weighs on the British engine maker.
Engineer Invensys rose 7 percent. It said on Monday it was not in offer talks after Chief Executive Ulf Henriksson speculated in the Daily Telegraph on Nov. 13 that its partner, China Southern Rail, could do a deal if the price was right.
British outsourcing firm Serco added 1.4 percent after a bullish update, with peer Capita rising 1 percent in tandem.
Miners recovered earlier losses with Lonmin up 3.1 percent after the world's third-biggest platinum producer restarted dividends and posted a swing to full-year profit, with JP Morgan upgrading its rating.
(Editing by David Hulmes)