* FTSE 100 up 0.8 percent at highest close since Oct. 6
* Euro zone data, Fed comment underpin recovery hopes
* Miners buoyed by firmer metal prices
By Harpreet Bhal
LONDON, Aug 13 (Reuters) - Britain's top share index hit a 10-month closing high on Thursday lifted by a rally in mining stocks, after reassuring gross domestic product (GDP) data from France and Germany fuelled hopes of an economic recovery.
The FTSE 100 closed up 0.8 percent, or 38.7 points, at 4,755.46, the highest closing level since Oct. 6 and slightly off an intra-day peak of 4,789.98 hit earlier in the session.
All the miners on the index were in positive territory, underpinned by firmer metals prices on increased demand hopes. Among the bigger movers, Antofagasta, Eurasian Natural Resources , Kazakhmys and Xstrata gained between 4.6 and 6 percent.
The euro zone economy shrank less than expected in the second quarter, data showed, adding to signs that the worst of the recession could be over.
Germany and France surprised many analysts by posting rises in their second-quarter gross domestic product (GDP) figures.
"The level of sentiment clearly is picking up. We had a positive surprise out of the euro zone, which gave markets a lift," said Peter Dixon, economist at Commerzbank.
"As long as the international envirnment continues to exceed expectations that bodes well for UK equities as the bulk of the companies on the FTSE trade in international markets," he said.
Adding to the prospect of recovery, the U.S. Federal Reserve said on Wednesday that the U.S. economy was levelling out and the worst of the recession could be over.
However, U.S. data showing an unexpected fall in July retail sales and an increase in the number of workers filing new claims for jobless benefits highlighted the challenges still facing the recession-hit economy.
BANKS IN DEMAND
Banks were also in demand, with Barclays, HSBC, Royal Bank of Scotland (RBS) and Lloyds Banking Group up between 2.8 and 1.7 percent.
Insurers were also in demand, after Prudential climbed 10.7 percent to top the gainers list. It raised its interim dividend after reporting a smaller-than-expected drop in half-year profit.
Peers Aviva, Legal & General, Old Mutual and Standard Life added 0.4 to 4.4 percent.
Oil and gas services firm Petrofac was a big blue-chip riser, up 8.9 percent as the stock was added to the MSCI UK index.
Thomas Cook was the biggest FTSE 100 faller, losing 4.8 percent after saying it expected to miss its operating profit target of 480 million pounds in 2010 because of tough market conditions.
Defensive stocks took a back seat as investors dipped into assets perceived as higher risk. Drugmakers AstraZeneca and GlaxoSmithKline shed 0.1 and 1.9 percent, respectively.
Oil majors were weaker, as traders banked profits following gains on Wednesday. BG Group, BP and Royal Dutch Shell down 0.3 to 1.1 percent.
Utilities were also heavily sold, with Centrica, National Grid, Penon Group, Severn Trent and United Utilities losing between 0.5 and 1.7 percent. (Editing by Karen Foster)