FTSE gains 0.9 pct as rate outlook eases jitters

* FTSE gains 0.9 percent

* Oils, miners gain on improved demand

* Banks recover on capital raising approvals

* Talk of further rate cuts helps sentiment

By Nick Vinocur

LONDON, Nov 21 (Reuters) - Britain's leading share index was up 0.9 percent at midday on Friday, as talk of further interest rate cuts eased worries about the financial sector, while miners and oils gained on firmer commodity prices.

By 1207 GMT the FTSE 100 .FTSE was up 34.11 points at 3,909.10, having ended down 130.69 points, or 3.3 percent, on Thursday.

Wall Street futures pointed to a rebound from Thursday's rout, when a frantic flight from risk drove the Standard & Poor's 500 index to its lowest level since 1997.  Continued...