Anglo American leads Britain's FTSE higher, GKN slides

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* FTSE 100 index up 0.5 pct

* Anglo American (LSE: AAL.L - news) leads market higher

* GKN (Frankfurt: 694194 - news) falls after update

By Atul Prakash

LONDON, Oct (HKSE: 3366-OL.HK - news) 25 (Reuters) - Britain's top share index climbed on Tuesday, boosted by basic resources stocks, with Anglo American leading the market higher after a production update.

Anglo American shares were up 4 percent, taking its year-to-date gains to more than 250 percent and making it the top performing stock on Britain's blue-chip FTSE 100 index and Europe's STOXX 600 this year.

The UK mining index, up 86 percent this year, rose 2.3 percent to its highest since mid-2015. Shares (Berlin: DI6.BE - news) in other miners including Glencore (Frankfurt: 8GC.F - news) , Antofagasta (Other OTC: ANFGF - news) , Rio Tinto and BHP Billiton (NYSE: BBL - news) - up 1.6 to 3.5 percent on Tuesday - have surged between 39 and 170 percent in 2016.

The mining sector also tracked a rally in industrial metals, with prices of copper, aluminium and nickel rising more than 2 percent thanks to a weaker dollar.

"Miners are helping the FTSE 100 to trade above 7,000, with an update from Anglo American and stronger commodities prices improving sentiment," said Jawaid Afsar, senior trader at Securequity. "It seems investors are looking past the debt issues that saw mining shares plummeting last year."

Anglo American's performance, as well as that of the broader sector, is a marked turnaround from last year when a slowing China and high debt sent investors rushing for the exits. Investors have cheered moves to cut costs aggressively and sell assets to bolster balance sheets.

The FTSE 100 index was up 0.5 percent at 7,018.02 points after slipping in the previous two sessions, while the domestically-focused mid-cap index was trading almost flat.

Among other sharp movers, wealth manager St James's Place rose 2.5 percent after reporting a near 9-percent rise in the value of its assets, buoyed by financial market gains and strong demand for its personal investment advice.

Shares in British engineer GKN fell 2.8 percent, the top faller in the FTSE 100 index, after the company said it was seeing growth rates easing in its major markets.

Hotel (LSE: 31142665.L - news) operator Whitbread (Frankfurt: WHF4.F - news) fell 2.6 percent after the company said sales growth slowed and margins declined at its Costa Coffee chain, overshadowing a better-than-expected first-half profit.

"The strength of Premier Inn and Costa is being tested, not least by the National Living Wage, which has raised staffing costs," said Laith Khalaf, analyst at Hargreaves Lansdown (LSE: HL.L - news) .

"If Brexit does precipitate an economic slowdown next year, that will damage the appetite of businesses and consumers to spend money on hotel rooms." (Reporting by Atul Prakash; Editing by Andrew Heavens)