FTSE gains, Land Securities up after dividend hike

By Atul Prakash and Alistair Smout

LONDON (Reuters) - Britain's top share index rose on Tuesday, led by Land Securities which raised its dividend payout and helped offset a drop in heavily weighted miners and telecoms firm Vodafone.

The blue-chip FTSE 100 index (.FTSE) was up 26.23 points, or 0.4 percent at 6,995.10 points at the close. The index has gained nearly 7 percent so far this year.

Shares in Land Securities (LAND.L) rose 4 percent, one of the biggest FTSE 100 gains, after Britain's largest listed property developer hiked its dividend by 3.7 percent, saying a boom in demand for commercial property had boosted its net asset value by 27.6 percent in the year ended March 31.

"Land Securities numbers were good and highlight that the office space market will continue to improve with a further pickup in the economy. The company will benefit from a rise in the rental demand," Securequity trader Jawaid Afsar said.

Bottler Coca Cola HBC (CCH.L) was the top riser, gaining 4.3 percent after Barclays lifted its target price to 1220 pence from 1175 pence following above expectation earnings reported last week.

Gains in the broader stock market were capped by a drop in miners after prices of key industrial metals fell. The UK mining index was down 2.5 percent.

BHP Billiton dropped 3.9 percent after J.P. Morgan cut its target price for the stock to 1,425 pence from 1,600 pence.

The FTSE 100 performed less strongly than continental European indexes, with analysts attributing much of its underperformance to its heavy weighting in mining stocks. [.EU]

The materials sector, including miners, trimmed over 11 points off the FTSE 100 (.FTSE).

"We see no near-term catalyst for an improvement in the outlook for metal prices," said Jeremy Batstone-Carr, market analyst at Charles Stanley, adding that he had a preference for euro zone shares over Britain's blue chips.

"The pressure is still on the mining sector... and UK shares look comparatively less attractive than other places."

Among top individual decliners, Vodafone (VOD.L) fell 3.2 percent as some traders said the mobile network operator's guidance had been slightly below expectations, even though Vodafone returned to quarterly sales growth.

"Vodafone ... delivered a more cautious outlook than expected as it presses ahead with network investment to increase both speed and coverage and reduce customer churn," Mike van Dulken, head of research at Accendo Markets, said.

"It would appear that the prospect of further network investment being required to offset squeezed consumers is weighing on expectations."

(Editing by Alison Williams/Ruth Pitchford)