FTSE rises 1.5 pct early on oils and banks

* FTSE 100 up 60.96 points at 4,213.65 by 0846 GMT

* Oils and banks rebound

* UK house prices fall 0.4 pct in November

By Dominic Lau

LONDON, Nov 27 (Reuters) - Britain's leading share index tracked gains in the U.S. and Asian markets early on Thursday, helped by rebounding bank and oil stocks.

By 0846 GMT, the FTSE 100 .FTSE was up 60.96 points, or 1.5 percent, at 4,213.65, after falling 0.4 percent on Wednesday to snap a two-day winning streak. The UK benchmark is down 34.8 percent for the year on fears of a severe global recession.

Oil shares rebounded, adding the most points to the index. BP (BP.L: Quote, Profile, Research, Stock Buzz) gained 2.3 percent, Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) put on 2.1 percent and Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) advanced 2.3 percent.

Overnight, U.S. shares climbed as investors snapped up tech stocks trading near their cheapest levels in five years, and renewed hopes of a General Motors bailout helped investors shrug off data depicting a worsening global economic downturn. In Asia, Japan's Nikkei average .N225 rose 2 percent. U.S. markets are closed for the Thanksgiving holiday, while trading on India's stock exchanges was stopped after a series of attacks by suspected Islamist gunmen in the commercial capital Mumbai killed at least 101 people.

UK banks were generally firmer, with HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) gaining 5.8 percent, Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) strengthening 6.8 percent and Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) adding 6.5 percent.

British house price fell 0.4 percent in November as the credit crisis continues to hit the housing market, but the annual rate of decline eased slightly following October's record drop, a survey showed. [ID:nLQ299155] Old Mutual (OML.L: Quote, Profile, Research, Stock Buzz) was 2.4 percent higher. The insurer said it has scrapped the sale of its majority stake in South African general insurer Mutual & Federal, blaming "increasingly difficult economic conditions".

"We are clearly looking up today but having said that it is going to be a fairly quiet day. On the other hand, more concerns will be expected in the retail sector given the situation in Woolworths ... and the poor results from DSG," said Howard Wheeldon, senior strategist at BGC Partners.

"I don't think the incident in Mumbai will affect markets here but it makes things a bit more nervous," he said, adding that people may want to pick up defensive stocks.

Drugmakers AstraZeneca (AZN.L: Quote, Profile, Research, Stock Buzz), GlaxoSmithKline (GSK.L: Quote, Profile, Research, Stock Buzz) and Shire (SHP.L: Quote, Profile, Research, Stock Buzz) were up between 1.2 and 1.5 percent.

Economic woes took a further toll with DVDs-to-sweet retailer Woolworths (WLW.L: Quote, Profile, Research, Stock Buzz) putting its business into administration after discussions relating to the potential sale of its retail business ended. [ID:nLR072006]

Mid-cap DSG International (DSGI.L: Quote, Profile, Research, Stock Buzz) slipped 1.8 percent after Europe's second-largest electrical goods retailer swung to a first-half loss and suspended its dividend as it grapples with the deepening consumer downturn. [ID:nLQ121072]

Kingfisher (KGF.L: Quote, Profile, Research, Stock Buzz) sank 4.1 percent after Europe's top home improvement retailer beat forecasts with an 8.3 percent rise in third-quarter profit but said trading conditions were tough. [ID:nLQ305656]

Within the retail sector, Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) edged up 0.7 percent.

TUI Travel (TT.L: Quote, Profile, Research, Stock Buzz) rose 1.5 percent after Europe's biggest travel firm reported a 43 percent increase in full-year pretax profit as it benefited from a strong performance in the United Kingdom and the delivery of merger synergies. Rival Thomas Cook (TCG.L: Quote, Profile, Research, Stock Buzz) was up 3 percent. (Editing by Simon Jessop)