(Reuters) - Gains in financial stocks and oil majors drove London's main index higher in early trade on Friday, while small-cap Thomas Cook tanked after a proposed 750 million-pound bailout.
The FTSE 100 <.FTSE> edged 0.2% higher amid increasing bets that the U.S. central bank will cut interest rates later this month. The mid-cap FTSE 250 <.FTMC> added 0.1% by 0710 GMT.
An index of financials companies <.FTNMX8350> rose after two sessions of losses, while Shell <RDSa.L> and BP <BP.L> were also among the biggest boosts to the index in early dealings.
Thomas Cook <TCG.L>, hit recently by fading demand for packaged holidays and high debt, slumped more than 30% on a proposed bailout which would hand control of its packaged-tour business to largest shareholder Fosun Tourism <1992.HK>.
Small-cap Lookers <LOOK.L>, whose shares have almost halved in value this year as the car dealership chain battles weaker car demand in Britain, sank 26% after it warned on annual profit.
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Bernard Orr)
