FTSE records best week in three years; ABF leads

* FTSE 100 ends up 0.5 pct; biggest weekly rise since late 2011

* Associated British Foods (LSE: ABF.L - news) top gainer after retail sales data

* Mining shares fall as metals prices weaken

* BT, Vodafone helped by consolidation prospects

By Atul Prakash

LONDON, Jan 23 (Reuters) - Britain's top shares index climbed to a four-month high on Friday and recorded its biggest weekly gain in three years, with Associated British Foods leading the market higher on encouraging retail sales data.

However, the FTSE 100 index underperformed European markets, as shares of mining companies fell. The index ended 0.5 percent higher at 6,832.83 points, compared with 2 percent gains for some European indices, which benefited from the quantitative easing the European Central Bank announced on Thursday.

Associated British Foods rose 3 percent, with traders saying the stock was helped by an encouraging update from Premier Foods (LSE: PFD.L - news) , up 10.9 percent, and after data showed UK retail sales rose 0.4 percent in December, beating expectations for a 0.6 percent fall.

"Companies such as Associated British Foods (ABF) are getting support from encouraging UK retail sales numbers. ABF is one to chase amongst retailers because of positive prospects at its discount fashion chain Primark and as its expansion programme in the United States is likely to support valuations going forward," Jawaid Afsar, sales trader at Securequity, said.

Some telecoms shares also gained on hopes of consolidation in the sector. BT rose 2.3 percent and Vodafone was up 0.6 percent, after Hutchison Whampoa, the owner of Britain's Three Mobile network, agreed to buy 02, the British mobile business of Telefonica.

Investors were pricing in higher margins for operators Vodafone, Three and EE, which BT is in talks to acquire.

A sharp drop in mining shares following a slump in metals prices capped gains. The UK mining index fell 3.4 percent. Antofagasta (Other OTC: ANFGF - news) , Glencore (Xetra: A1JAGV - news) and Rio Tinto (Xetra: 855018 - news) fell 2.8 to 5.8 percent.

"The FTSE is being held back relative to euro zone stocks by commodity prices, which are generally under pressure following sharp euro weakening because they are priced in dollars," Edmund Shing, global equity fund manager at BCS Asset Management, said.

Metals and energy companies have about a 22 percent weighting in the FTSE 100 index, against about 6 percent in some euro zone share indexes, analysts said.

Despite the underperformance, the FTSE 100 was up 4.2 percent this week, its best weekly gain since late 2011.

After the euphoria caused by the ECB's quantitative easing programme, traders saw a potential hurdle in Greek elections this weekend. Polls show the anti-bailout party Syriza is set to win. (Additional reporting By Francesco Canepa; Editing by Larry King)