* FTSE up 0.9 percent, technicals point to further upside
* Miners lifted by record metal prices, RIO Tinto M&A
* Unicredit urges investors to buy insurers
By David Brett
LONDON, April 8 (Reuters) - Rallying miners pushed Britain's top share index higher on Friday, boosted by M&A activity and record high metal prices, as analysts saw further upside momentum to the index's recent rally.
By 1058 GMT, the FTSE 100 climbed 53.68 points or 0.9 percent to 6,061.05, having closed down 0.6 percent in the previous session.
"Quotes remain within an upward sloping channel drawn from March 25 and the 30-minute relative strength index is holding above its support base around 35," Philippe Delabarre, technical analyst at Trading Central, said.
"Furthermore, a broadening wedge is taking shape and calls for a further rise."
London's blue chip index has rallied near 8 percent since its March low and edged closer to its 2011 high of 6,105.77, following the lead set by Asian markets after it appeared a strong aftershock that struck Japan's earthquake-ravaged northeast late on Thursday had not done major damage.
"Another strong earthquake in Japan temporarily unsettled the capital markets on Thursday. Yet investors subsequently shifted their attention back to the good macro data," Stefan Angele, Head of Investment Management, Swiss & Global Asset Management, which has around 80 billion swiss francs of funds under management.
Angele sees the IT sector as well as energy and materials benefiting most from the global economic recovery and the business cycle.
Miners gained after gold and silver struck record highs on Friday. A weaker dollar and concerns about inflation sent investors piling into precious metals.
Global miner Rio Tinto rose 1.8 percent after it assumed control of Mozambique-focused coal miner Riversdale.
Indian-focused miner Vedanta gained 1.2 percent after fourth-quarter production figures. But uncertainty lingers over its long-delayed purchase of Cairn Energy's Cairn India unit.
INTEREST RATE CONUNDRUM
UK Government data showed producer output prices rose by 5.4 percent, confounding expectations of a slowdown to an annual 5.1 percent.
This would likely raise expectations of a interest rate rise. Investors are almost fully pricing in a 25 basis point rate hike in July with a better than a 50 percent chance being priced in for May.
The buy case for equities remained strong compared to other asset classes, according Citigroup analyst Jonathan Stubbs.
"Absolute valuations are around average, while equities continue to look attractive relative to bonds in a more inflationary world," he said.
"We forecast double digit returns for equities as markets track expected earnings growth in 2011. Stay bullish."
Insurers were among the top performers on the FTSE 100, helped by a note from UniCredit, which recommended investors to long the sector and short retailers.
The broker says the European Central Bank's interest rate rises will be supportive to the insurance sector though the monetary tightening will crimp consumer spending.
Old Mutual, which completed the sale of its U.S. life business to Harbinger Group on Thursday, rose 2.3 percent, while Prudential added 1.9 percent.
Shire gained 1.6 percent after an after an update from U.S. regulator FDA on a safety review of hyperactivity medications, including the pharma company's Vyvanse and Adderall XR, recommends no changes to the labels or use of the medications at this time.
Utility Scottish & Southern Energy climbed 1.6 percent as Credit Suisse upgraded its stance to "outperform".
A downgrade to "underperform" from "neutral" by the same broker, however, saw broker ICAP shed 4.3 percent.
Intertek fell 1.7 percent as JPMorgan cut its rating on the testing firm to "neutral" from "overweight", on valuation grounds. (Editing by Hans Peters)