With stocks on Wall Street eying a strong start ahead of their open later on Tuesday, London's blue chip index <.FTSE> swung into positive territory, up 21.09 points, or 0.4 percent to 5,333.85 by 11:58 a.m.

Volumes were thin -- the FTSE 100 having traded just 25 percent of its average 90-day volume around midday -- and the index was led by defensive stocks as concerns remained over the global economic outlook.

We've seen a turnaround but there's not much support for it. Merely day traders trying to make a quick buck, Jimmy Yates, head of equities at CMC Markets, said.

The catalyst appears to be the well supported Italian bond auction but the yields they paid for the debt will provide the most cause for concern.

Italy sold debt close to the upper end of its target range but borrowing costs hit euro lifetime peaks at an auction on Tuesday, ahead of a meeting of European finance ministers as investors demanded ever higher premiums to keep funding the country.

EU ministers will meet to agree the terms of bolstering their bailout fund to help prevent contagion in bond markets, where Italian and Spanish debt yields have been pushed to unsustainable long-term levels.

In Britain finance minister George Osborne will face a difficult task defending his austerity programme on Tuesday, when he is expected to unveil forecasts showing much weaker growth and a borrowing overshoot of at least 86 billion pounds over four years.

The Bank of England will bolster its asset purchase programme early next year as the British economy struggles in the face of a raging European debt crisis and sweeping government spending cuts, a Reuters poll found on Tuesday.

SAFETY FIRST

Drugmakers GlaxoSmithKline and Shire rose 0.9 and 1.1 percent, respectively, as investors hunted for protection from the economic storm engulfing the global economy.

Vodafone , liked for its dividend and robust fundamentals, added 0.8 percent.

James Lowen and Clive Beagles, co-managers of the JOHCM UK Equity Income Fund said they are focussing on balance sheet strength during this challenging corporate environment.

Safe balance sheets provide protection on the downside and give management teams options on the upside. Companies with net cash or low levels of debt on their balance sheets are being undervalued despite the optionality that this provides.

Lowen and Beagles said Tesco , up 0.7 percent, looked compelling for reasons including its low valuation, the company's overseas exposure, its repositioning in the UK and the management team's new focus on return on capital employed.

Elsewhere on the upside, G4S climbed 2.6 percent, as HSBC lifted its rating on the security firm to overweight from neutral, with the bank citing valuation grounds.

GKN was up 2.7 percent, with traders citing technical reasons for the move, while Man Group and Randgold Resources bounced up 3.4 and 4.3 percent, respectively following recent sharp falls.

Pressure remained on banks after Moody's ratings agency warned it could downgrade the subordinated debt of 87 banks across 15 countries on concerns that governments would be too cash-strapped to bail them out.

Part state-owned Lloyds Banking Group was down 1.3 percent.

Fitch Ratings agency cut its U.S. outlook to negative, although it left the country's stellar credit rating untouched, while traders, citing a report in French newspaper La Tribune, said S&P may give France a negative outlook in next couple of weeks.

On the macroeconomic front, in the U.S., a number of data releases are due on Tuesday, including November consumer confidence figures at 1500 GMT.

(Additional reporting by Tricia Wright, Simon Jessop; Editing by Mike Nesbit)