* FTSE 100 up 0.1 percent
* Lloyds falls 6 percent on insurance charge
* BoE, ECB interest rate decisions eyed
By Tricia Wright
LONDON, May 5 (Reuters) - Britain's FTSE 100 share index rose on Thursday, boosted by commodity stocks as traders pointed to expectations of interest rates staying low for longer but gains were limited by weaker bank shares.
Lloyds Banking Group dropping 6 percent in heavy trading after it took a 3.2 billion-pound ($5.3 billion) provision against settling claims for mis-selling debt repayment protection insurance.
By 0820 GMT the FTSE 100 was up 5.09 points, or 0.1 percent, at 5,989.16, having fallen 98.81 points, or 1.6 percent on Wednesday.
Investors awaited interest rate decisions in Britain and mainland Europe, at 1100 GMT and 1145 GMT respectively.
A weak outlook for Britain's economy means the Bank of England's Monetary Policy Committee (MPC) is expected to keep the UK base rate at a record low of 0.5 percent, held since March 2009.
"It's very difficult for them to raise rates at this time, so there's a little bit of optimism there. Of course, lower rates for longer is good for equity markets," Angus Campbell, head of sales at Capital Spreads, said.
"Within the MPC, the hawk Andrew Sentance's time is coming up, and he's due to be replaced by someone who is unlikely to call for hikes going forward."
The European Central Bank, after April's quarter-point rate hike to 1.25 percent, is not expected to make any further changes for the time being.
RANDGOLD SHINES
Miners regained their poise after heavy falls on Wednesday on fears of more China tightening and after disappointing U.S. data which further dented the demand outlook. Randgold Resources was among the best off, up 1.3 percent, after the West African-focused gold miner posted results, with profit jumping 92 percent in the first quarter on higher gold production and prices.
These numbers were part of a hefty wedge of corporate results and updates investors were confronted with on Thursday.
Smith & Nephew was among the star blue-chip performers, climbing 2 percent, after the artificial knee and hip maker posted solid first-quarter results, prompting Investec Securities to upgrade its rating to "buy" from "hold".
Investec, in a note, said the numbers show Smith & Nephew is "more than holding its own", with the valuation looking more attractive now that bid speculation has eased.
Diageo was another good FTSE 100 riser, up 1.7 percent, after the spirits maker beat forecasts with strong sales growth in the first three months of 2011 as buoyant emerging market growth offset a weak Europe.
Espirito Santo said the company's valuation is not excessive in the context of the consumer staples universe and "with minimal impact to be expected from higher raw material costs this feels like a good place to be".
And oil services and engineering group AMEC firmed 1.7 percent as it said the outlook for its nuclear unit was unchanged despite the nuclear crisis in Japan, and reported a strong order intake for the first four months of 2011.
"Stocks attempted to recover some of yesterday's losses as the FTSE traded above 6000 from the open," Manoj Ladwa, senior trader at ETX Capital, said.
"But any further upside has been hampered after disappointing first-quarter results from Lloyds. Overall, trading activity is expected to be quiet ahead of the Bank of England's interest rate decision later today." (Editing by Greg Mahlich)