FTSE rises as commodities gain; Vodafone down

* FTSE 100 up 0.5 pct

* Commodities lead the upside to track higher oil prices

* Vodafone weighs

By Michael Taylor

LONDON, Aug 29 (Reuters) - Britain's leading share index was up 0.5 percent by midday on Friday as commodity companies boosted by higher energy prices supported, while heavyweight Vodafone (VOD.L: Quote, Profile, Research, Stock Buzz) dragged.

At 1018 GMT the FTSE 100 .FTSE was up 27.4 points at 5,628.6 after closing at a two-month high in the previous session.

Oil and metal stocks tracked higher U.S. crude prices CLc1, at almost $117 a barrel as oil companies prepared for Tropical Storm Gustav to deliver what could be the hardest hit to the heart of U.S. offshore production since the devastating 2005 hurricane season.

BP (BP.L: Quote, Profile, Research, Stock Buzz) tacked on 1.2 percent, gas producer BG Group (BG.L: Quote, Profile, Research, Stock Buzz) added 1.4 percent and Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) was up 2.6 percent. British oil and gas services firm Petrofac (PFC.L: Quote, Profile, Research, Stock Buzz) topped the FTSE 100 gainers list with a rise of 5.2 percent. The company said it has bought production technology firm Caltec Ltd for a maximum 30 million pounds ($54.85 million).

Miners were the top sectoral gainer, however, accounting for over 11 positive index points, with BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) rising between 1.5 and 2 percent.

On the downside, heavyweight Vodafone (VOD.L: Quote, Profile, Research, Stock Buzz) lost 1.7 percent after negative broker comment on Thursday and as jointly-owned South African mobile operator Vodacom agreed to buy most of African network and satellite services firm Gateway for $700 million including debt. [ID:nLT250204]

Shares in Enterprise Inns (ETI.L: Quote, Profile, Research, Stock Buzz) shed 3.8 percent, hit by an investment rating downgrade by Landsbanki to "reduce" from "hold" and an initiation as "underperform" by Credit Suisse in two negative reviews of the UK pubs sector.

"The outlook for economic growth and corporate profits is far from great and any fundamental improvement will take time given the excesses that have built up over the last few years," said Nick Batsford, an analyst at Hobart Capital Markets.

"I have no idea whether or not we've hit rock bottom. (But) the bulls are still tentatively on the field, they have the ball and therefore I must run with the strongest plays."

"I will look for stocks with bullish chart patterns, in bullish sectors along with bullish fundamentals," he added.

UK banking shares were steady, as investors' optimism about a recovery in the global economy got a lift following the release of U.S. economic data on Thursday.  Continued...