* Banks rally; HSBC upgraded by Credit Suisse
* Pharmas higher boosted by broker upgrade
* Miners, oils retreat after recent rally
By Jon Hopkins
LONDON, June 11 (Reuters) - Britain's top share index was up 0.5 percent approaching midday on Thursday with gains in banks and pharma issues, driven by broker upgrades, countering weakness in heavyweight oils and miners.
At 1034 GMT, the FTSE 100 index was up 20.24 points at 4,456.99, having closed up 31.96 points, or 0.7 percent, at 4,436.75 in the previous session.
"While there is a skip in the step for the wider UK economy ... the markets continue to trundle feebly from one end of a narrow range to the other," said Anthony Grech, market strategist at spread betters IG Index.
"For now at least, trading on the stock market is still very much a waiting game. But once the floodgates open we may see some impressive movements after weeks of purposeless meandering," Grech added.
Banks were the best performing blue chips by midday, pulled higher by a rally from earlier falls by sector heavyweight HSBC , up 2.9 percent after Credit Suisse raised its rating to "outperform" from "neutral".
In a sector review, the broker said it thinks funding is a key challenge for the European banks but believes that HSBC is well-placed for that challenge.
Royal Bank of Scotland was the top FTSE 100 gainer, up 5.3 percent, while Lloyds Banking Group added 3.1, and Barclays took on 2.8 percent.
The company managing Britain's stakes in Royal Bank of Scotland and Lloyds Banking Group could sell an "exchangeable bond" in the two banks, according to the Daily Telegraph.
GlaxoSmithKline was also a strong blue-chip gainer, up 2.2 percent as Morgan Stanley raised its rating to "equal-weight" in a review of European drug stocks, with the broker raising its sector view to "attractive" from "in-line".
Peer AstraZeneca gained 0.9 percent. Three widely used antipsychotic medications, including AstraZeneca's Seroquel, appear safe and effective overall in treating children and teenagers with schizophrenia or bipolar disorder, a U.S. advisory panel said.
COMMODS RETREAT
Oil majors retreated after recent gains as crude prices consolidated around $72 a barrel, with BP, Royal Dutch Shell, and Cairn Energy losing 0.6 to 0.7 percent.
Selected miners also saw a recent rally curbed as metal prices came off the boil, with BHP Billiton, Xstrata, Anglo American, and Vedanta Resources losing between 0.3 and 1.2 percent.
Rio Tinto, however, gained 0.4 percent, turning round from earlier falls. Rio offered a share in a planned iron ore alliance with BHP Billiton to Chinalco as a peace offering following the collapse of Rio's $19.5 billion deal with the Chinese firm, the Australian Financial Review said on Thursday.
Engineering blue chip Invensys was in demand, adding 3.2 percent, while mid-cap peer Tomkins took on 4.1 percent as Goldman Sachs hiked its rating for both to "buy".
Intertek, however, lost 0.8 percent after Cazenove cut its stance to "in-line" from "outperform" after reducing estimates for the testing equipment firm for currency factors.
U.S. stocks futures were pointing to a higher open on Thursday with investors eyeing U.S. May retail sales and weekly jobless claims numbers, both due at 1230 GMT, which may provide further clarity on the world's largest economy.
"Sentiment is a bit like a water bed, you never know quite which way it's going to bulge in the short term, but for the market to go ... significantly higher we need to see evidence that economies have turned the corner ... and that actual economic growth has arrived," said Andrew Bell, European strategist at investment managers Rensburg Sheppards. (Editing by Rupert Winchester)