* FTSE 100 up 1.1 percent
* Banks, commodity stocks push higher * Third quarter earnings in focus; Apple results awaited
By Simon Falush
LONDON, Oct 19 (Reuters) - Britain's top share index gained 1.1 percent early on Monday, driven by strength in commodity stocks and banks as optimism about the third quarter earnings season and outlook for the global economy boosted equities.
By 0813 GMT the FTSE 100 was 55.84 points higher at 5,246.08 after falling 0.6 percent on Friday.
Energy stocks were the biggest positive for the index as crude prices hit a one-year high, rising for the seventh straight session.
BG Group, BP, Royal Dutch Shell and Tullow oil added 1.2 to 1.9 percent.
Equity markets retreated on Friday after results from Bank of America and General Electric failed to live up to raised expectations after results from JPMorgan earlier in the week, but optimism remains that there will be further positive surprises.
"Earnings are likely to beat expectations because expectations have been driven down over the previous nine months and against a relatively easy comparative last year," said Jeremy Batstone-Carr, analyst at Charles Stanley.
Also pointing to a slightly improved outlook for the British economy, property Web site Rightmove said house prices in England and Wales rose for the first time in more than a year in October, buoyed by a dearth of properties coming onto the market.
MINERS GAIN
Miners tracked higher metal prices. Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and Fresnillo added 1.7 to 3.7 percent.
The blue-chip index is up 18.7 percent this year and has surged 52 percent since touching a six-year trough in March, but is still 2.9 percent below its level when Lehman Brothers collapsed last September.
Also benefiting from improved risk appetite, banks were broadly higher, with Barclays, HSBC and Standard Chartered ahead 0.8 to 2.4 percent.
However, part-nationalised banks Lloyds Banking Group and Royal Bank of Scotland were the top two FTSE 100 fallers, down 1.3 and 1.1 percent respectively, as cash call worries persisted for them.
Telecoms firm Cable & Wireless was also a notable blue chip faller, down 0.8 percent after Citigroup cut its rating on the stock to "hold" from "buy".
Among the mid caps, bus and rail group National Express shares jumped 9.1 percent after Stagecoach confirmed it approached its rival about a possible merger in a deal which was valued by the Sunday Telegraph at 1.65 billion pounds ($2.7 billion). Stagecoach fell 3.3 percent.
With the corporate earnings focus remaining across the Atlantic, Apple is among a number of U.S. companies set to report earnings later in the day, although after London's close.
No major UK or U.S. economic data will be released on Monday and investors' main macro focus this week will on be the first reading for UK Q3 GDP figures, due on Friday.
British GDP growth will struggle to hit 1 percent in 2010, according to the Ernst & Young ITEM Club's autumn forecast.
The Bank of England must continue its policy of quantitative easing because the financial system has yet to recover fully, Monetary Policy Committee member Adam Posen said in a newspaper interview on Sunday. (Additional reporting by Paul Sandle; Editing by Hans Peters)