UK Stocks -- Factors to watch on July 9

LONDON, July 9 (Reuters) - Britain's FTSE 100 .FTSE index is seen opening up as much as 1.2 percent on Wednesday, according to financial bookmakers, drawing strength from sharp gains in the U.S. markets as oil prices eased.

But political tensions in the Middle East could put a damper on the rebounding markets after Iran's state media said the country had test-fired nine missiles, including one which it has previously said could travel as far as Israel and U.S. bases in the region.

In Asia, Japan's Nikkei average .N225 pared gains after the news, while crude oil prices CLc1 gained more than $1 to $137 a barrel.

Financial bookmakers expected the UK benchmark index to open up 60 to 65 points after closing down 72.2 points, or 1.3 percent, at 5,440.5 on Tuesday.

The Bank of England will begin a two-day rate setting policy meeting later in the day and analysts are expected the central bank to leave interest rates unchanged at 5 percent.

Four FTSE-100 companies, SABMiller (SAB.L: Quote, Profile, Research), Carphone Warehouse (CPW.L: Quote, Profile, Research), Lonmin (LMI.L: Quote, Profile, Research) and Vedanta Resources (VED.L: Quote, Profile, Research), will go ex-dividend this session and together are expected to take 1.3 points off the index.

* US shrs rises on banks, lower oil; Alcoa up late [nN08471024] * Japan's Nikkei up 1.8 pct as financial worries ease [nT89859] * Asia stocks rebound as oil falls below $136 [nSP26335] * Dollar holds gains after relief from Bernanke, oil [nT69374] * Oil steadies after fall to $136,awaits inventories[nSIN21588] * Gold extends losses on US dollar, near 2-week low [nSP220408]

UK stocks to watch on Wednesday are:

MARKS & SPENCER (MKS.L: Quote, Profile, Research)