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Updated at 1600 GMT

By Pranav Kashyap and Medha Singh

Aug 7 (Reuters) -London stocks broadly rose for a second straight session on Wednesday, with gains in financial stocks and upbeat corporate earnings helping the indexes claw back most of the losses from earlier this week.

The blue-chip FTSE 100 index .FTSE ended 1.8% higher in its best showing in more than four months, while the mid-cap FTSE 250 index .FTMC closed 1% higher.

The gains came as global risk appetite improved after the Bank of Japan unexpectedly turned cautious on rate hikes, inducing a sharp fall in the yen which was partly blamed for market turbulence on Monday.

Lenders HSBC HSBA.L, Lloyds Banking LLOY.L and Barclays BARC.L were among the top boosts to the FTSE 100 index.

The investment banking and brokerage sector .FTNMX302020 jumped 1.5%, with wealth manager Quilter QLT.L gaining 4.6% after forecast half-year earnings forecasts above expectations.

Inter-dealer broker TP ICAP TCAPI.L surged 7.8% after reporting better-than-expected half-year pre-tax profit, and topping the FTSE 250 index.

Homebuilders .FTNMX402020 advanced 1.5% after data showed that housing prices in the country rose by the most in six months in July.

Recessionary fears in the United States after weak economic data last week had triggered a market meltdown on Monday, however nerves were soothed by positive U.S. data this week and comments from Federal Reserve policymakers.

Energy giants Shell SHEL.L and BP BP.L also got a boost as oil prices rebounded from multi-month lows. O/R

WPP WPP.L fell about 2% after the ad group cut its annual revenue growth outlook and agreed to sell its controlling stake in FGS Global to KKR for $775 million.

Bottler Coca-Cola HBC CCH.L fell 1.5% despite boosting its annual operating profit and revenue forecast and a higher first-half revenue.

Reporting by Purvi Agarwal in Bengaluru; Editing by Sonia Cheema, William Maclean

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