* FTSE 100 up 0.5 pct
* Banks gain after results of BOE stress tests
* Miners, oil firms steady with dollar weaker
* Babcock suffers from Citi downgrade (Adds quote and detail, updates prices)
By Alistair Smout and Kit Rees
LONDON, Dec 1 (Reuters) - Britain's top share index rose on Tuesday, reversing the previous session's underperformance, buoyed by a rise in the banking sector after it came through the Bank of England's stress tests unscathed.
Financial stocks added around 20 points to a 33.01 point advance for Britain's FTSE, which was up 0.5 percent at 6,389.05 by 1219 GMT, outperforming European indexes.
Royal Bank of Scotland, Standard Chartered, HSBC, Barclays and Lloyds gained between 0.7 to 3.8 percent after the results of the latest Bank of England tests.
While RBS and Standard Chartered both only passed because of steps they took to improve their capital ratios during the testing process, the other lenders did not have to take action.
Bank of England Governor Mark Carney said on Tuesday there was no new wave of capital regulation for banks in the pipeline, after the central bank set out plans to require them to hold extra capital.
"Bank executives must be breathing a sigh of relief ... It is reassuring for consumers and financial authorities to recognise that the industry has tightened up how it conducts its business," Simon Goldsmith, Head of Risk Solutions at SAS UK & Ireland, said.
Mining and oil shares rose slightly after a dip in the previous session. Copper and oil prices received support from a drop in the dollar, while China's factories slowed in November, underlining the headwinds facing demand.
Among fallers, Babcock retreated 1.7 percent after a downgrade to "sell" from Citi.
"While Babcock is an excellent operator with solid barriers to entry in a growing market, we currently see too many risks for comfort around its shares' investment case," analysts at the U.S. bank said in a note.
Among mid-caps, UK power supplier Drax surged 13.2 percent after the EU cleared state aid to convert the Lynemouth coal-fired power plant to biomass, while diamond miner Petra Diamonds jumped 11.1 percent after saying it will buy a stake in De Beers Kimberley Mines in South Africa. (Editing by Andrew Heavens)