* FTSE 100 up 1%, FTSE 250 up 1.5%
* Greene King shares surge 50% after takeover bid
* Chinese moves on corporate interest rates lift stocks globally
* BP, Shell jump as Yemen attack adds to Middle East tensions
* HSBC leads other Asia-focused financials (Adds company news items, updates share moves, changes analyst quote)
By Muvija M and Indranil Sarkar
Aug 19 (Reuters) - London's FTSE 100 bagged gains on Monday led by oil majors and Asia-exposed banks that rose on moves by China to keep business interest rates low, while pub operator Greene King helped midcaps outshine after agreeing to be bought out.
The FTSE 100 added 1%, its biggest one-day rise in more than 10 days, but a 50% surge in Greene King shares helped the FTSE 250 index outperform with a 1.5% rise.
Shell and BP jumped roughly 2%, tracking a surge in crude prices following a drone attack by Yemen's Houthi group on an oilfield in eastern Saudi Arabia on Saturday, which caused a fire at a gas plant and added to Middle East tensions.
Miners and Asia-focused stocks, led by HSBC , also rose after China's central bank announced reforms to help lower borrowing costs for companies and support an economy bruised by the trade war with the United States.
Meanwhile, UK-centric Lloyds and Barclays advanced after a report last week that Germany would be prepared to take on new debt to counter a possible recession.
Ocado added 4.5%, topping the blue-chip index, after JP Morgan hiked its price target and said the online grocer operates "a superior economic model" compared with its store-based rivals.
Greene King, the brewer of Old Speckled Hen and Abbot Ale, surged to a more than 3-year high to match a 850 pence a share offer from CK Asset Holdings, which was founded by Hong Kong's richest man Li Ka-Shing.
The deal, which values Greene King at 2.7 billion pounds, lifted shares in rivals JD Wetherspoon and Marston's by more than 9%. FTSE 100 constituent and Premier Inn owner Whitbread also gained 3%.
CYBG added 5.3% after UBS upgraded the stock and said the lender's net interest margin is set to rise from here even in the current rates environment.
Investors will keep a close watch on Federal Reserve Chairman Jerome Powell's speech later this week for his commentary on interest rates.
The UK indexes, much like their global counterparts, spiralled to multi-month lows last week on fears of recession after yields on 10-year U.S. and UK government bonds fell below two-year equivalents for the first time since the financial crisis.
Despite a recovery since then, the FTSE 100 index is still on course for its steepest monthly fall in four years.
"We still see limited near-term recession risks as central banks' dovish pivot helps stretch the economic cycle, yet caution that trade and geopolitical tensions pose downside risks," BlackRock analysts wrote in their weekly note. (Additional reporting by Shashwat Awasthi and Tanishaa Nadkar in Bengaluru Editing by Patrick Graham and Mark Heinrich)