* Energy stocks higher; BP boosted by results
* Pharma issues in demand ahead of upcoming numbers
* Banks weak; ING fate unsettles RBS, Lloyds Banking
By Jon Hopkins
LONDON, Oct 27 (Reuters) - Britain's leading share index gained 0.2 percent on Tuesday lifted by a rally from heavyweight energy issues led by BP after its forecast-beating third-quarter results, which offset weakness in banks and mining stocks.
At the close, the FTSE 100 was 9.23 points higher at 5,200.97, after ending 1 percent lower on Monday.
The blue-chip index has gained about 51 percent since hitting a six-year low in March, though is still 3.7 percent below its level in mid-September 2008, before the collapse of Lehman Brothers.
Energy stocks added the most points to the FTSE 100 index headed by BP, up 4.8 percent after the oil major reported a halving of third-quarter profits but beat forecasts by a wide margin.
"BP provided the FTSE's fuel today, stoking hopes that UK Q3 corporate earnings will outperform, but there remains enough uncertainty, in a thinly traded market, to curb overall enthusiasm," said Mic Mills, senior trader at ETX Capital.
BG Group, which posts its third-quarter results on Wednesday, added 0.8 percent, while Royal Dutch Shell firmed 1.7 percent, and Cairn Energy gained 0.8 percent.
Drugmakers were also in demand ahead of third-quarter numbers from the sector later this week.
GlaxoSmithKline, due to post results on Wednesday, added 2.2 percent. The stock was helped by news the company and a Danish biotech firm had won U.S approval to sell a leukaemia drug.
AstraZeneca, scheduled to report its results on Thursday, rose 2 percent, while Shire added 0.5 percent.
Elsewhere among the blue-chip gainers, a broker upgrade boosted Reed Elsevier, up 3.3 percent. Exane BNP Paribas lifted its rating for the Anglo-Dutch publishing group to "outperform" from "underperform" on valuation grounds.
Home Retail Group was also hoisted by broker comment, adding 2.7 percent as Barclays Capital started coverage on the Argos-owner with an "overweight" rating in an otherwise negative initiation note on the European retail sector.
British retail sales volumes grew at their fastest pace in almost two years in October, a CBI survey indicated on Tuesday, with retailers more upbeat about future prospects than at any time since July 2007.
BANKS WEIGH
Banks were the biggest drag on the blue-chip index, with Royal Bank of Scotland the top faller, off 8.2 percent.
Investors were unsettled by mounting fears that RBS and Lloyds Banking Group could be ordered into disposals by the European Commission after Dutch peer ING on Monday announced that it would split into two and launch a 7.5 billion euro rights issue in a move designed to satisfy regulators.
Lloyds shares fell 6.2 percent, while Barclays, HSBC and Standard Chartered shed 0.8 to 3.6 percent.
Heavyweight miners were weak reflecting easier metal prices as doubts about the demand outlook resurfaced.
Vedanta Resources, Fresnillo, Rio Tinto, Xstrata, Anglo American, and Kazakhmys lost 2.1 to 5.1 percent.
U.S. blue chips were 0.4 percent higher by London's close, rallying following sharp falls on Monday having overcome an earlier wobble seen after lower-than-expected U.S. consumer confidence data.
Optimism was underpinned by the Case-Shiller 20-city home price index, which rose for the fourth-straight month in August, adding to signs of economic stability in the United States. (Editing by Simon Jessop)