* FTSE 100 adds 1.9 percent by midday, touches 2-wk high
* Strong U.S corporate earnings adds support
* Banks and energy firms advance
* U.S CPI eyed later in the session
By Harpreet Bhal
LONDON, July 15 (Reuters) - Britain's top share index rose to a two-week high by midday on Wednesday as strong U.S corporate earnings in the previous session helped support positive sentiment, lifting banks and energy stocks.
By 1050 GMT, the FTSE 100 index was up 1.9 percent, or 79.26 points, at 4316.94, extending gains from Tuesday's close, up for a third straight day and on track for its best weekly gain in two months.
Chip maker Intel Corp continued the successful start to the U.S. second-quarter earnings season by releasing better than expected results, following upbeat figures delivered by Goldman Sachs.
"Clients are a bit more optimistic than they were a couple of weeks ago because the U.S earnings season has started in earnest," said Micky Mahbubani, sales trader at IG Index.
"What we see is more and more people talking about green shoots in the economy. The mood is cautiously optimistic," he said.
Banks added most points to the index, led by a 4.1 percent gain in Barclays. HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered added between 1.1 and 4 percent.
Energy firms were also in positive territory as crude remained above $60 and Nigerian rebels declared a 60-day cease-fire in their local campaign targeting oil and gas installations.
Tullow Oil topped the energy stock risers, up 5.5 percent as it announced its Jubilee field phase 1 development plan had been formally approved by the minister of energy in Ghana.
Cairn Energy, Royal Dutch Shell, BP and BG Group gained between 1.2 and 1.8 percent.
Traders cheered higher metals prices as the demand outlook remained positive, with miners adding to Tuesday's gains.
Fresnillo, Kazakhmys, Eurasian Natural Resources, Lonmin and Xstrata rose between 2.9 and 5.4 percent.
Rio Tinto lifted 4 percent after the company said iron ore output in the second quarter was up 8 percent on a year earlier.
UNEMPLOYMENT RISES
British unemployment hit its highest rate since January 2007 in the three months to May, although the number of people claiming jobless benefit rose by much less than expected last month, the Office of National Statistics said.
The data showed claimant count unemployment rose by 23,800 in June, much less than analysts' forecasts for a rise of 40,500. Nonetheless, the claimant count rate rose to 4.8 percent, its highest since November 1997.
On a more positive note for the UK economy, Land Securities , the UK real estate company, said it was preparing for new buys in the battered UK commercial property market. It added 3.6 percent.
RSA Insurance led insurers higher, up 4.1 percent, with traders citing talk of bid interest from Generali
Prudential, Aviva, Legal & General and Old Mutual gained between 0.9 and 4.1 percent.
ICAP, the world's largest interdealer broker, fell 1.9 percent, the FTSE's top faller, after going ex-dividend, but falls were tempered as it posted a 10 percent rise in revenue for the period between April and June.
BT dropped 0.7 percent after the Financial Times said it was bracing itself for a battle with Britain's pensions regulator over its retirement plan.
Later on Wednesday, the release of fresh U.S. CPI data will keep economic fundamentals on the agenda. (Editing by Simon Jessop)