Top shares rose around midday on Friday with banks retaining gains after mixed results from an Italian debt auction and results from U.S. peer JPMorgan Chase, as the FTSE 100 continued its struggle to hold above 5,700.

London's blue-chip index <.FTSE> was up 15.56 points, or 0.3 percent, at 5,677.98, by 11:34 a.m. The index, however, again struggled to get a strong hold above the 5,700 resistance level, falling from a session-high 5,709.22.

As long as 5,565 is not penetrated, the upside prevails towards 5,760 and 5,800, Nicolas Suiffet, a technical analyst at Trading Central, said.

Alternatively, a break below 5,565 would tarnish the outlook and open the way to 5,330, 5,215 and 4,945, he said.

Banks were the biggest gainers with sentiment surrounding the euro zone improving, while JPMorgan Chase reported fourth-quarter earnings in line with expectations, according to Thomson Reuters data.

Royal Bank of Scotland , which announced a dramatic restructuring on Thursday, rose 6.5 percent, as Seymour Pierce double-upgraded the lender to buy from reduce.

Peers Lloyds Banking Group and Barclays rose 2.8 percent as the cost of debt in distressed euro zone nations such as Italy and Spain fell.

Italy sold three-year benchmark paper at a gross yield of 4.83 percent, down from 5.62 percent last month, although interest waned: the auction drew bids of 1.22 times the amount on offer, compared with a 2011 average of 1.39, disappointing some analysts.

That prompted a fall in the euro against the dollar and a swing into negative territory for the oil price -- a strong U.S. currency is not good for the dollar-denominated commodity -- which prompted some profit-taking in the integrated oil sector.

Royal Dutch Shell and BP were down around 0.3 percent, while BG Group pared early gains inspired by a bullish note from JPMorgan.


With risk appetite back among investors for the time being, beaten-down miners recovered some ground.

Kazakhmys was up 2.1 percent as Societe Generale initiated the firm with a buy rating. That followed recent bullish comment on the miner from analysts.

Among telecoms, BT Group gained 1.3 percent after Nomura lifted it two notches to buy from reduce.

But heavyweight Vodafone shed 1.6 percent on a recent note from Morgan Stanley, which cut its price target and forecasts, and alongside trader talk of it lowering guidance.

Elsewhere, Tesco -- which traded 276 percent of its 90-day average -- swung into positive territory after recent heavy falls, following its first-ever profit warning.

Tesco shares rose 0.4 percent after hitting their lowest level since March 2009 earlier in the session, while brokers began cutting recommendations and forecasts following the previous session's update.

On the downside, British business supplies distributor Bunzl slipped 1.1 percent as UBS cut its rating to neutral from buy.

Chip designer ARM Holding was off 1.3 percent as investors continued to worry over its outlook given the competition on smartphones and tablets from Intel .

UBS also turned negative on FTSE 100 earnings per share (EPS) growth forecasts, predicting this would shrink 5 percent in 2012, down from a previous flat outlook.

It also now estimates the FTSE will end 2012 at around 5,800, against 6,100 previously.

Earnings worries caused a rupture in mid-cap firm Invensys's share price, which fell 19.6 percent to a two-year low as the British engineer said its profit will be hit by higher costs in its rail division and in work on Chinese nuclear reactors.

On the data front, British factory gate inflation fell more than expected in December, boosting expectations the Bank of England will soon inject further stimulus into the struggling economy.

Across the Atlantic, U.S. international trade figures will be released at 1:30 p.m., with the second, provisional reading for the Reuters/University of Michigan consumer sentiment index due at 2:45 p.m.

(Additional reporting by Jon Hopkins; Editing by David Hulmes)