REFILE-FTSE up 0.7 pct in early trade; oils, miners, banks ral

* FTSE up 0.7 percent

* Oils, miners rally with commodity prices

* Banks recover on capital raising approvals

* Defensive issues out of favour

By Jon Hopkins

LONDON, Nov 21 (Reuters) - Britain's FTSE 100 share index .FTSE was 0.7 percent higher in early trade on Friday, helped by heavyweight oils, miners and banks after Thursday's hefty losses, and with U.S. stock index futures pointing to a higher opening on Wall Street after a plunge overnight.

By 0901 GMT the FTSE 100 index was 27.91 points firmer at 3,902.90 having ended 130.69 points, or 3.3 percent lower on Thursday. The index has lost around 40 percent so far this year.

U.S. stocks plunged on Thursday as a frantic flight from risk prompted by investors' deepening economic fears drove the Standard & Poor's 500 index to its lowest level since 1997.

"Today's modest gain is fairly impressive given events overnight, with sentiment reversed on U.S. futures, mainly thanks to specific hopes for Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and its funding requirements," said Tim Hughes, a strategist at IG Index,

Oil and mining issues provided the main boost for the FTSE 100 index after recent big retreats by both sectors.

Energy issues recovered as crude prices CLc1 bobbed back above the $50 a barrel level surrendered on Thursday, with BG Group ahead 5.9 percent, BP (BP.L: Quote, Profile, Research, Stock Buzz) up 1.8 percent, and explorer Cairn Energy up 3.5 percent.

Heavyweight miners also gave a boost to the blue chips, recovering after recent sharp falls on bargin-hunting and as commodity prices stabilised.

Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), a big faller in recent sessions, topped the FTSE leaders board, up 9.2 percent, BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) took on 3.4 percent, Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz) firmed 2.5 percent, and Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) added 2.3 percent.

Banks rose after recent poor performances as government bailout capital-raising plans continue to meet approval from shareholders, with prices helped too, traders said, by vague talk of possible sector consolidation.

U.S. giant Citigroup is considering selling itself after the recent plunge in its share price, the online edition of the Wall Street Journal said.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) gained 4.3 percent with its shareholders having approved plans for a government bail on Thursday, Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), which will see its shareholders vote on capital raising plans next week, firmed 2.6 percent, while HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) added 2.3 percent and HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) took on 1.9 percent.

DEFENSIVE ISSUES OUT OF FAVOUR

National Grid NGG.L was a FTSE 100 faller, down 2.3 percent following Thursday's gains afetr its well-received first-half results, as HSBC cut its rating to "neutral" from "overweight".

Water group Severn Trent (SVT.L: Quote, Profile, Research, Stock Buzz) lost 1.9 percent in continuing reaction to a Merrill Lynch downgrade on Thursday.

Tobacco stocks were out of favour as their defensive attractions faded, with British American Tobacco (BATS.L: Quote, Profile, Research, Stock Buzz) down 1.5 percent, and Imperial Tobacco (IMT.L: Quote, Profile, Research, Stock Buzz) off 1.1 percent. UBS cut its price target for Imperial Tobacco to 1,700 pence from 1.945.

Asian shares were higher Friday amid hopes the sell off in New York would prompt some bargain hunting, with the Nikkei 225 .N225 up 3 percent and Hong Kong's Hang Seng .SSEC gaining 6 percent.

"Overall trade is still very choppy, particularly ahead of Monday's UK Pre-Budget Report", said Tim Hughes. "As ever hopes for big tax cuts can be easily dashed and those that do come could fall foul of concrens over irresponsible fiscal spending." (Editing by Greg Mahlich)