UK's FTSE 100 hits three — week high on financials strength, falling bond yields

(For a Reuters live blog on US, UK and European stock markets, click LIVE/ or type LIVE/ in a news window) Oct 13 (Reuters) — Britain's blue-chip index rose to a three-week high on Tuesday, lifted by financial stocks, while retreating oil prices and easing bond yields also supported risk appetite. The FTSE 100 index rose 0.73% to 10,762.01 points to its highest since September 23 by 10:23 AM GMT, while the midcap FTSE 250 was up 0.28%. Oil prices dropped 2% on prospects of additional diesel supplies from Russia O/R UK's 10-year benchmark gilt yields fell nearly 5 basis points to 5.40% The broader banks sector was up 1.2%; NatWest advanced 2.6% after Barclays upgraded the stock to "overweight" from "equal-weight" British finance minister John Healey will not raise capital gains tax to the same level as income tax, the FT reported on Tuesday, citing four sources The International Monetary Fund said that Britain needs to keep deficit reduction on track "John Healey will opt for a compromise Budget on Wednesday 28th October, with limited implications for the economy and the markets," said Ruth Gregory, deputy chief UK economist, Capital Economics, in a note BP shares rose 1.3% to a six