* FTSE 100 up 1.6 pct
* Banks firm on Barroso euro bond comments
* Next jumps on raised profit guidance
* BP up ahead of Macondo Gulf oil spill report
By Tricia Wright
LONDON, Sept 14 (Reuters) - Britain's FTSE 100 share index rose on Wednesday after comments from European Commission President Jose Manuel Barroso promising new moves to alleviate the euro zone debt crisis, as investors awaited talks between Greece, France and Germany.
Barroso said the Commission will soon present options for the introduction of euro area bonds, though he warned financial markets would only trust that the euro zone can resolve the crisis when it shows that it can deliver on its commitments.
The index was up 82.97 points, or 1.6 percent, at 5,257.22 by 1127 GMT, having gained 0.9 percent on Tuesday.
Investors awaited a conference call on Wednesday by Greek Prime Minister George Papandreou with French President Nicolas Sarkozy and German Chancellor Angela Merkel, although traders merely anticipated further rhetoric.
"I suspect expectations are riding high that we will see a rabbit pulled from a hat at the... meeting later today," Darren Sinden, senior sales trader at Silverwind Securities, said.
China and the United States have urged Europe's leaders to prevent the euro area debt mess from spreading, underlining the international alarm over a crisis now threatening Italy, the zone's third-biggest economy.
This came as Citigroup economists argued that a Greek exit from the euro area should be avoided at all costs, cautioning that it would result in "a crisis for the world".
Andrew Bell, chief executive of the 1.1 billion pound Witan Investment Trust, reckoned Europe will in fact "get a grip on" the Greek situation.
"A combination of ECB buying bonds, unquestioning provision of liquidity to the banking sector and a weaker euro (all of which are likely to happen) look to be key ingredients in restoring confidence," he said.
"Markets might become impatient at Europe taking another few weeks to sort out something so urgent but equity markets look more likely to rally on any positive developments than to fall significantly simply because of a delay."
Banks , normally the most sensitive to the twists in the euro zone debt story, found favour, led higher by Royal Bank of Scotland , up 6.4 percent, while Barclays added 3.8 percent.
The sector had initially come under pressure after Moody's Investors Service downgraded credit ratings on Credit Agricole and Societe Generale by one notch, as expected, citing their exposure to the Greek economy.
Bargain-hunting was behind much of the buying seen in the
market, with beaten-down energy stocks and miners
in demand on Wednesday despite weaker crude
BP rose more than 4 percent and was among the top FTSE 100 gainers after a report fuelled hopes a U.S. probe into the U.S. Gulf oil spill would spread the blame, thereby limiting BP's liabilities.
A London-based trader said a report in the Wall Street Journal, citing a person who had seen the keenly awaited report into the probe, was fuelling the gains.
Analysts have said the report could be a catalyst for BP's recovery as it would enable investors to assess whether BP will be found grossly negligent -- something on which tens of billions of dollars worth of fines and penalties hinge.
Next grabbed the top spot on the blue-chip leader board, up 6.8 percent, as Britain's second-biggest fashion retailer raised its full-year profit guidance after posting an 8.5 percent rise in its first-half profit.
Sentiment in the sector was aided by the news. Kingfisher , ahead of results on Thursday, added 4.5 percent, while Marks & Spencer firmed 3 percent.
"On a valuation basis again we are seeing some buying into risk with banks and miners (among top risers) and with positive news from Next this morning we are seeing buying back into retail given the recent sell-off in that sector," director of Trading Equities & Derivatives at Guardian Stockbrokers, said.
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