* Oils, miners boosted by firmer commodity prices
* Defensive issues, led by tobaccos retreat
* UK wholesale inflation numbers awaited
By Jon Hopkins
LONDON, Sept 11 (Reuters) - Britain's top share index gained 0.5 percent in early deals on Friday, moving back above the 5,000 level, led by strength in heavyweight oils, miners and banks, supported by gains on Wall Street and in Asia.
By 0808 GMT, the FTSE 100 index was 26.73 points higher at 5,014.41, having closed 16.62 points, or 0.3 percent lower on Thursday at 4,987.68.
The benchmark index closed above 5,000 for the first time since late September 2008 on Wednesday.
"The rally that few people understand has continued today and it would take a brave investor to bet against the current momentum," said Arifa Sheikh-Usmani, equity trader at Spreadex.
The UK blue-chip index has risen about 44 percent since hitting a six-year trough in March, though is still down almost 8 percent from its level in mid-September 2008, before the collapse of Lehman Brothers.
"The FTSE seems to be trading pretty comfortably around the 5,000 level and the continued dollar weakness is giving it extra support as commodities push higher," Sheikh-Usmani added.
Oil majors provided the main impetus for early blue-chip gains as crude prices held above $72, with BP, Royal Dutch Shell , BG Group, Cairn Energy, and Tullow Oil up between 0.1 and 1.9 percent.
Miners were also higher after solid industrial output data from China boosted the outlook for demand for metals.
Antofagasta, Xstrata, Rio Tinto, BHP Billiton, and Anglo American gained 1.6 to 1.9 percent.
Banks were also higher as a sector, led by Lloyds Banking Group, up 2.1 percent as SG Securities assumed coverage of the bank with a "buy" rating and 160 pence target price.
Lloyds Banking Group's Irish unit, Bank of Scotland (Ireland), wants to participate in a potential merger to create a "third force" in Irish banking, the Irish Times reported on Friday.
Royal Bank of Scotland gained 0.9 percent with SG Securities assuming coverage of it with a "hold" rating and 55 pence target price, while Barclays added 0.4 percent, but HSBC and Standard Chartered lost 0.3 and 0.6 percent, respectively. Hedge fund manager Man Group was the biggest FTSE 100 gainer, up 2.6 percent, boosted by an increase in equity valuations.
Insurer Prudential took on 1.2 percent as the firm's Chief Executive-Elect, Tidjane Thiam, said it will look to Asia as a source of capital and could even seek to raise equity there, according to a Financial Times report.
DEFENSIVES RETREAT
Tobacco stocks were the biggest blue-chip fallers early on, giving up some gains made on Thursday following positive broker comments, with British American Tobacco and Imperial Tobacco losing 0.7 and 0.1 percent, respectively. Other stocks perceived as defensive also retreated as investors' risk appetite returned.
Drugs firm GlaxoSmithKline lost 0.3 percent, drinks group Diageo shed 0.6 percent, food producer Associated British Foods fell 0.3 percent, and mobile phones heavyweight Vodafone slipped 0.2 percent lower.
On the economics front, UK wholesale inflation numbers are due for release at 0830 GMT.
Expectations are for PPI output to rise 0.1 percent on the month, following a 0.3 percent rise in July, giving a 0.5 percent year-on-year decrease, which would follow a 1.3 percent decline the previous month.
Later in the session investor attention will be drawn across the Atlantic, to the University of Michigan September consumer sentiment data, U.S. import/export prices for August, wholesale inventories/sales for July, and the Federal budget for August. (Editing by Rupert Winchester)