Britain's FTSE boosted, with pharmaceutical stocks in demand

* FTSE 100 up 0.4 pct

* AstraZeneca (NYSE: AZN - news) gets double upgrade from Morgan Stanley (Xetra: 885836 - news)

* Sage falls after results

* Greene King (Other OTC: GKNGY - news) leads mid-caps (Adds quote and details, updates prices)

By Alistair Smout and Kit Rees

LONDON, Dec 2 (Reuters) - Britain's top share index rose on Wednesday as drugmakers gained after recommendations by bullish brokers, although software company Sage fell after reporting results.

Britain's FTSE 100 was up 0.4 percent at 6,423.41 points by 1307 GMT, with pharmaceutical stocks contributing the most to gains.

GlaxoSmithKline (Other OTC: GLAXF - news) , AstraZeneca and Shire (Hamburg: 3979575.HM - news) combined to add over 10 points to the index, with the sector lifted by a note from Morgan Stanley. AstraZeneca (Swiss: AZN.SW - news) benefited from a double upgrade to "overweight" and GlaxoSmithKline saw its target price lifted.

"AstraZeneca ... has underperformed dramatically over the past year, but looks set to reap the rewards of heavy investment, at an attractive valuation," Morgan Stanley said in the note.

Sage led declines, falling 2.1 percent. The software company said it achieved its target of growing revenue by 6 percent in the 12 months ended September and it would equal or better the performance in its new financial year.

While the underlying performance was strong, brokers said, currency swings and an accounting change muddied the picture.

"Our initial take is that Sage's underlying performance is possibly a touch ahead of expectations, albeit currency headwinds mean that the overall numbers are in-line," analysts at Numis said in a note, cutting their rating to "hold" from "buy".

"However, this is all slightly muddied by an accounting policy change which we expect to cause some early sell-side confusion this morning."

Traders also said a slight miss in headline full-year revenues weighed on Sage Group (LSE: SGE.L - news) 's share price.

"(We are) starting to see the market becoming more competitive and loss of market share," Atif Latif, director of trading at Guardian Stockbrokers, said in a written note, adding that there was also the potential for earnings-per-share downgrades.

Among mid-caps, Greene King Plc gained over 10 percent. It (Other OTC: ITGL - news) posted a rise in profit in its first set of interim results since taking over smaller rival Spirit Pub (LSE: 120214.L - news) , as more customers flocked to its pubs.

Among FTSE 250 fallers, price comparison site Moneysupermarket fell 6.6 percent after its founder sold a stake in the company.

Saga Plc (LSE: SAGA.L - news) also suffered from a stake sale. Acromas Bid Co Ltd, the travel and insurance firm's largest shareholder, sold a 13 percent stake through a discounted placing. The shares fell more than 5 percent. (Editing by Larry King)