Britain's FTSE sees M&A, commodities-related boost

* FTSE 100 up 0.5 pct at close

* Reckitt Benckiser (Xetra: A0M1W6 - news) takeover news buoys stock

* Aberdeen fund manager sinks on further outflows (Recasts, adds detail, updates prices at close)

By Kit Rees and Helen Reid

LONDON, Feb 2 (Reuters) - Britain's blue-chip FTSE 100 index rose on Thursday, as shares in consumer products group Reckitt Benckiser jumped on M&A-related news and energy and mining sectors were also strong.

The FTSE 100 closed 0.5 percent higher at 7,140.75 points, marking its biggest one-day gain in two weeks. The index extended gains when sterling reversed course after the Bank of England disappointed bets that interest rates could be hiked by the end of the year.

A weaker currency benefits the FTSE 100's international firms which dominate the index.

Reckitt Benckiser was the biggest gainer after saying it was in advanced talks to buy U.S. baby-food maker Mead Johnson.

Its shares rose more than 4 percent and saw their 30-day average daily volume traded in the first 40 minutes of the session.

"Reckitt Benckiser makes it a brace of companies whose share prices have defied traditional M&A reaction recently, rising on news of spending big to acquire," Mike van Dulken, head of research at Accendo Markets, said in a note.

Foodservice company Compass Group (Other OTC: CMPGF - news) gained 3 percent after maintaining its full-year outlook.

Miners Randgold Resources and Fresnillo (Amsterdam: FN6.AS - news) also supported the index, up 3 percent and 1.2 percent respectively as the price of gold also rose.

Shares (Berlin: DI6.BE - news) in oil major Shell (LSE: RDSB.L - news) climbed 1.3 percent despite profits missing expectations, as debt reduction efforts and a healthy dividend pleased investors.

"Upstream made a profit two quarters in a row, which will give people encouragement, and cash flow was strong," added Russ Mould, investment director at AJ Bell.

Worldpay Group (Other OTC: WDDYF - news) was the worst-performing blue-chip stock, down 2.6 percent after stakeholder Ship Global 2 &CY S.C.A. sold 214 million shares in the online payments company.

Among smaller firms, Aberdeen Asset Management (Frankfurt: 899502 - news) was down 3.3 percent after its first-quarter trading update showed outflows of 10.5 billion pounds, higher than expected.

This marks the 14th consecutive quarter of equity outflows for the firm, UBS (LSE: 0QNR.L - news) analysts said.

Energy companies led the small-cap index higher, with oil exploration consultant RPS Group (Frankfurt: 874849 - news) up 12.4 percent after it increased its profit outlook. Its shares posted their best daily gains since September 2009.

Liberum analysts cited new U.S. President Donald Trump's commitment to infrastructure spending, and reinitiation of the Keystone XL pipeline project, as positive for RPS, on which it has a 'buy' rating.

(Reporting by Kit Rees and Helen Reid; Editing by Gareth Jones)