Commodities lead FTSE up; banks rise on Lehman

* FTSE 100 up 1.4 pct

* Banks rally on Lehman rescue hopes

* Miners, oils higher with commodity prices

By Jon Hopkins

LONDON, Sept 12 (Reuters) - Britain's leading share index .FTSE pushed higher early on Friday, lifted by strength in heavyweight oils and miners and with banks up on hopes U.S. investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) could be rescued.

By 0755 GMT, the FTSE 100 was 73.6 points, or 1.4 percent higher at 5,392.0, snapping a three-day losing run. The UK benchmark closed down 0.9 percent on Wednesday.

U.S. blue chips .DJI rose on Thursday as a report that Lehman is shopping itself to possible buyers, including Bank of America BOA.N and Barclays BARCL, drove a last minute rebound in financial shares.

Barclays gained 2.6 percent, seemingly shrugging aside the talk it could be involved in a rescue for Lehman, while Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) and HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) all added between 1.3 and 2.8 percent.

"It's simply a relief rally after New York turned around dramatically overnight, although I don't believe it. I think it's going to prove to be short-lived with the banks having further to come down," said David Buick of BGC Partners,

"We're still going to be bouncing around like a cork in the ocean over the next few months," Buik added.

Gains by mining issues were the main boost for the FTSE 100 as the prices of gold and other metals jumped again as consumers returned to the market looking for bargains after recent sharp price falls.

Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Anglo-American (AAL.L: Quote, Profile, Research, Stock Buzz) and BHP Billiton BHP.L gained between 4.1 and 5.3 percent.

Oil majors also found support as crude prices CLc1 recovered to above $101 a barrel and the markets kept a watchful eye on the path of Hurricane Ike.

TUI Travel (TT.L: Quote, Profile, Research, Stock Buzz) and Thomas Cook (TCG.L: Quote, Profile, Research, Stock Buzz) gained 7.8 and 3.8 percent respectively after the collapse of Britain's third-largest tour operator, privately-owned XL Leisure, reduced competition in holidays market.

WOLSELEY HIT BY DOWNGRADE

Plumbing supplies firm Wolseley (WOS.L: Quote, Profile, Research, Stock Buzz) was the worst FTSE 100 performer, down 4.8 percent after Citigroup cut its rating for the stock to "sell" from "hold" while leaving its target unchanged at 310 pence.

The broker noted weaker housing conditions in all of the group's markets.

Retailer Next (NXT.L: Quote, Profile, Research, Stock Buzz) was also knocked by a broker downgrade after its recent results. It shed 1.4 percent after Morgan Stanley cut its stance to "equal-weight" from "overweight".

Other retailers suffered again at the end of a week of disappointing trading news and results, with Morrison Supermarkets (MRW.L: Quote, Profile, Research, Stock Buzz) down another 2.3 percent following Thursday's first-half results, with Kingfisher (KGF.L: Quote, Profile, Research, Stock Buzz) off 1.9 percent and Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) 0.8 percent lower.

Among the mid caps, Kesa Electricals (KESA.L: Quote, Profile, Research, Stock Buzz) fell another 2 percent after its Q1 sales disappointment earlier in the week, with UBS downgrading its rating to "neutral" from "buy" and chopping its target to 135 pence from 240. (Editing by Paul Bolding)