Stronger miners help FTSE on China demand hopes

* FTSE 100 up 0.1 percent

* Miners in demand, bouncing back after recent falls

* Ex-dividends including BP knock off 12 points

By Tricia Wright

LONDON, May 11 (Reuters) - Strong miners lifted Britain's top shares on Wednesday on hopes of good demand from China, as investors digested a Bank of England inflation report which could mean a rate rise sooner than markets previously thought.

The FTSE 100 index <.FTSE> was up 7.04 points, or 0.1 percent, at 6,025.93 by 1138 GMT, after rising 1.3 percent on Tuesday to a one-week closing high.

Gains were seen from the miners as investors bought into a sector which has endured recent sharp falls, with some analysts saying China's bumper trade data this week was enough to indicate continued confidence in metals demand regardless of potential rate hikes.

Meanwhile, the Bank of England raised its medium-term inflation forecast to just under 2 percent in its May report, potentially paving the way for a November rate rise.

"The inflation upgrade is the main juicy part of the detail which kind of makes a rate hike a little bit more feasible towards the end of this year as opposed to next year now," Joshua Raymond, market strategist at City Index, said.

Marks & Spencer was the sharpest blue-chip riser, up 2.7 percent after JPMorgan Cazenove double upgraded its rating for the retailer to "overweight" from "underweight", citing the retailer's recent trading performance and scope for recovery.

Elsewhere on the high street, J Sainsbury added 0.9 percent after the grocer met full-year profit forecasts.

LUXURY WANTED

Buyers came in for Burberry , up 1.8 percent, after fellow luxury goods companies Bulgari and Hermes posted strong first-quarter sales, bolstered by strong demand in Asia.

Sentiment in the sector was also aided by a positive note on European luxury goods groups from Credit Suisse.

Elsewhere, Reed Elsevier climbed 1.4 percent after the Anglo-Dutch publisher held an upbeat seminar on its risk solutions business. The investor day on Tuesday "marked a significant turning point in the company's communication strategy," Credit Suisse said in a note.

A trading update from Dutch peer Wolters Kluwer , up 3.6 percent, also helped Reed.

Ex-dividend factors knocked 12.02 points off the FTSE 100 index, with BP , Inmarsat , Morrison Supermarkets , Randgold Resources , Rexam , Royal Dutch Shell , Sage , Unilever and Whitbread all losing payout attractions.

Global heavyweight HSBC exerted downward pressure on the index, off 0.5 percent after the publication of a strategic review, hot on the heels of Monday's first-quarter results.

Europe's biggest bank will look to slash up to $3.5 billion in costs by cutting the scale of its wealth management and retail banking businesses. HSBC also appointed Richard Bennett as group managing director, reporting to chief executive Stuart Gulliver. [ID:nH9E7FS004] [ID:nH9E7ET01X]

ITV topped the FTSE 100 fallers' list, off 3.4 percent after a cautious trading update from the terrestrial broadcaster, with net advertising revenues seen down in May and June due to tough comparables. [ID:nLDE749183]

Observers were relatively upbeat about the FTSE 100's short-term prospects.

"The sell-off that we saw towards the end of last week was a little bit overdone and (we have been seeing) something of a rebound," Peter Dixon, an economist at Commerzbank, said.

"Earnings numbers seem to be coming in okay, and it is a generally reasonable environment ... as long as problems in Greece are not perceived to cause major problems for the UK market, then I would expect the modest upward trend to continue." (Editing by Dan Lalor)