Kingfisher helps put FTSE on track for biggest quarterly rise in 2 years

* FTSE 100 up 0.1 pct

* Set for largest quarterly gain since Q113

* Kingfisher (LSE: KGF.L - news) up as investors welcome store closures

* Antofagasta (Other OTC: ANFGF - news) boosted by M&A speculation

By Francesco Canepa

LONDON, March 31 (Reuters) - Britain's top share index was heading for its best quarterly gain in two years as it held steady on Tuesday, underpinned by a rally in Kingfisher after its trading update.

Shares (Berlin: DI6.BE - news) in Europe's biggest home improvement retailer rose 4.6 percent to the top of the FTSE 100 index after it said it planned to close about 60 underperforming stores in Britain while returning 200 million pounds ($295.56 million) to investors during the 2015-16 year.

The FTSE was up 0.1 percent at 6,895.56 points at 0801 GMT, taking its rise so far this quarter to 5 percent and setting it on track for its biggest quarterly gain in two years.

The London index, however, has lagged bigger gains in its euro zone counterparts, which were boosted by new stimulus measures from the European Central Bank.

The FTSE was also curbed by its large exposure to the energy and mining sectors, which have come under pressure in recent months due to oversupply pushing down the price of oil, iron ore and other basic materials.

Traders said UK stocks might struggle to make further headway in the run-up to Britain's general election on May 7, with opinion polls suggesting no party will win a majority.

"I think the FTSE will be treading water in the next month or so," said Mark Ward, head of execution trading at Sanlam Securities UK.

"You've got political risk heading into the election ... and a weaker oil price."

Miner Antofagasta rose 1.6 percent as a report about merger talks with Canada's Teck Resources, while denied by both companies, revived the stock's appeal as a possible mergers and acquisitions play.

"The market will feel they're in play," a trader said.

Antofagasta's largest shareholder is E. Abaroa Foundation, a vehicle created by the Luksic family, with a 60.66 percent stake, Thomson Reuters data showed. Jean-Paul Luksic owns a further 4.3 percent.

"Investors may interpret that the Luksic family is willing to part with Antofagasta but this is highly speculative at this point, in our view," analysts at Citi said in a note.

They added a deal with Teck would make "no apparent sense" given that synergies between the companies would be "relatively small".

Among mid-caps, outsourcing company Mitie fell 6.7 percent after saying its full-year operating profit was likely to be slightly lower than forecast due to cuts in local government spending. ($1 = 0.6767 pounds) (Reporting By Francesco Canepa; Editing by Susan Fenton)