* FTSE 100 index gains 1.0 percent
* Banks rally after recent sell-off
* Commods lifted by firmer metal prices after China data
By Jon Hopkins
LONDON, Dec 1 (Reuters) - Britain's top share index bounced higher in early trade on Wednesday, recovering after sharp falls over the past three sessions led by a rally from banks, and with commodity issues boosted by stronger than expected Chinese data.
At 0909 GMT, the FTSE 100 index was up 52.76 points or 1 percent at 5,581.03, having fallen nearly 3 percent since Thursday's close to levels not seen since mid-September.
"We're having a relief rally, which makes sense ... with the same old mob of banks, miners, and oils bouncing back," said David Buik, senior partner at BGC Capital.
Banks led the blue chip advance with the sector recovering after a sharp sell-off in recent sessions caused by concerns over European debt contagion.
Part-nationalised British banks Royal Bank of Scotland and Lloyds Banking Group were the best off, adding 3.0 and 2.9 percent, respectively.
Insurers, which have also suffered in the past few sessions as financial stocks got cold-shouldered, also rallied, led by Prudential, up 4.3 percent.
Prudential aims to double the value of its new business profits in Asia by 2013, taking advantage of the region's low penetration rates, the company said.
Miners found support as metal prices rose after data from China showed the world's biggest commodity consumer had revved up production in November by more than expected.
Xstrata was the best sector performer, ahead 4.4 percent, helped by a target price hike from Barclays Capital.
Integrated oils also rallied as the crude price moved higher, with BG Group adding 1.3 percent.
Software firm Sage Group was the top FTSE 100 gainer, ahead 4.4 percent after it posted a 14 percent rise in full-year profit, broadly in line with expectations, prompting Panmure Gordon to raises its target price.
DEFENSIVES DISMISSED
There were few blue chip fallers, with defensively-perceived issues the main stocks being shunned. Food retailers J Sainsbury and WM.Morrison lost 1.1 and 0.8 percent, respectively, while AB Foods shed 0.6 percent.
Ex-dividend factors also had an impact, with utilities Severn Trent and National Grid, real estate firm Land Securities and metals group Johnson Matthey losing their payout attractions, taking 2.83 points off the index.
On the macro front, British house prices fell for a fourth month in five in November, a survey showed, in a sign the downturn in the country's property market is becoming more entrenched.
Mortgage lender Nationwide said the average price of a property fell 0.3 percent, a slightly bigger drop than the 0.2 percent fall forecast by analysts. The annual rate of growth fell to 0.4 percent, its weakest since September 2009.
British manufacturing PMI data will be released at 0928 GMT, with a reading of 54.6 expected, down from 54.9 previously. (Editing by David Holmes)