* FTSE up 0.5 percent
* Banks rise as Nomura sees the sector well placed to rally
* Miners climb on HSBC upgrades
* BG up on $1.5 billion funding deal
By David Brett
LONDON, June 27 (Reuters) - Strength in banks lifted Britain's top share index on Monday, as analysts at Nomura said the sector was well placed to rally on hopes of positive news surrounding Greece's debt crisis over the next few days.
Greece's parliament begins on Monday debating measures to increase taxes and cut fiscal spending, without approval of which the European Union and International Monetary Fund say they will not disburse the fifth tranche of Greece's 110 billion euro ($158 billion) bailout programme.
"The market is pricing in a default scenario in Greece, while we expect a more benign outcome," nomura analyts Ian Scott said. "With relatively positive news over the past few days, we think financials, especially the banks, are placed to rally."
Part state-owned lender Lloyds Banking Group rose 0.9 percent to 40.5 pence, while Barclays added 0.4 percent to 238.1 pence.
One London-based analyst said the domestic banking sector remained under pressure having broken below two-year support levels last week. Barclays needed to get back above 250 pence to stabilise near term, while Lloyds's recent break below 45 pence could open up further weakness towards June 2009 lows at 39.60 pence.
Standard Chartered was up 2.1 percent ahead of a trading update on Tuesday.
Lothar Mentel, chief investment officer at Octopus Investments, whose fund company manages a total of 2.5 billion pounds ($4 billion), said the next bout of corporate earnings would be closely scrutinised by wary investors.
"We expect the next earnings reporting season (beginning in July) to be broadly positive, but drilling deeper there will be far more discrimination in the pricing of companies on the back of their announcements."
CHINA PRICED IN
Miners provided support for London's blue-chip index , up 26.14 points, or 0.5 percent, at 5,723.86 by 1046 GMT, as a bullish note on the sector from HSBC helped boost sentiment.
The broker upgraded its ratings for BHP Billiton , Anglo American , Vedanta Resources and Antofagasta , up 0.2-1.5 percent, saying that moderating growth in China was more than priced in.
Staying with commodity-related stocks, British gas and oil producer BG Group climbed 2.5 percent after signing a new cooperation agreement with Bank of China.
The deal allowed for up to $1.5 billion of new funding options to support the group's major growth programme.
Elsewhere, interdealer broker ICAP rose 2 percent as Singer Capital upgraded its rating to "buy" on valuation grounds.
On the downside, Inmarsat shed 1.3 percent as Citigroup downgraded its rating for the satellites operator to "hold" from "buy", reflecting low visibility in the maritime services segment, and a softening in demand from government agencies.
U.S. stock index futures signalled a rebound for equities on Wall Street on Monday, having shed 1 percent on Friday, ahead U.S. May personal income figures are scheduled for release at 1230 GMT. (Editing by Dan Lalor) ($1 = 0.698 euro) * For related prices, Reuters Terminal users may click on -
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