* FTSE 100 index gains 0.7 percent
* Banks bounce back, bolstered by HSBC rally
* BP leads oils higher after spill report
By Jon Hopkins
LONDON, Jan 6 (Reuters) - Britain's leading share index pushed higher by midday on Thursday driven by strength in heavyweight banks and commodities supported by recent signs of continued economic recovery.
At 1200 GMT, the FTSE 100 was up 42.91 points, or 0.7 percent at 6,086.77. The blue chip index has put on more than 3 percent in the first three trading sessions of 2011.
"Positive sentiment in the UK is rife ... Analysts from far and wide have been predicting a plentiful year for equities, with some even suggesting a possible break above 7,000 before the year-end," said Ben Critchley, sales trader at IG Index.
Banks were the top performing blue chips, recovering from earlier falls after recent signs of economic recovery from around the world, with global lender HSBC providing the main boost, up 1.1 percent.
Miners, which missed out on the rally in the previous session played catch-up, helped by firmer copper prices, with Xstrata ahead 3.1 percent.
However, mining company Antofagasta shed 0.7 percent, knocked by a double-downgrade to "reduce" from "buy" from Nomura.
Silver miner Fresnillo was the top FTSE 100 faller, down 1.9 percent, having posted a strong run in the past few weeks with the silver price and vague bid speculation.
But gold miner Randgold Resources added 3 percent, lifted by an upgrade to "buy" from "hold" by Citigroup.
Energy shares also moved higher, mainly thanks to strength in BP, ahead 1.8 percent, which shrugged off a scathing report from a U.S. presidential panel on the Gulf oil spill.
Evolution Securities said the report "supports our view that a gross negligence case against BP looks hard to prove, and could ultimately reduce BP's liabilities".
ARM EMBRACED
British chip designer ARM Holdings was the top blue chip gainer for the second consecutive session, up 8.3 percent to take its advance so far in 2011 to more than 16 percent, having risen 138 percent in 2010.
U.S. firm Microsoft Corp announced on Wednesday that it was linking up with the ARM to take on Apple Inc in the red-hot tablet and smartphone arena.
Rolls-Royce was also a strong gainer, up 1.9 percent after the engine maker completed contracts worth 5 billion pounds ($7.76 billion) with British Airways for its Trent engines, which will be used to power up to 61 new aircraft.
"Rolls Royce is clearly in very rude financial health, with the potential costs of the Trent failure seemingly modest in comparison to the very bright future ahead of the company," said Richard Curr, head of dealing at CFD specialist Prime Markets.
British Airways shares added 1.8 percent. The airline is due to issue its December traffic numbers at 1415 GMT.
Investors were looking to the latest weekly U.S. initial jobless numbers, due at 1330 GMT, to give a further indication for Friday's key December U.S. jobs report.
Better-than-expected U.S. employment figures from ADP Employer Services on Wednesday indicated that the recovery in the world's largest economy was gaining pace, and led economists to raise their forecasts for December non-farm payrolls. (Editing by Sharon Lindores) ($1=.6445 Pound)