Retailer Next shines on FTSE as index hits 5-month high

* FTSE 100 gains 0.1 pct, up for fifth straight session

* Next is top gainer after raises 2013 profit forecast

* Barclays (LSE: BARC.L - news) report helps banks rebound

(Adds quote, detail, updates prices)

By Alistair Smout

LONDON, Oct (KOSDAQ: 039200.KQ - news) 30 (Reuters) - Britain's top shares rose to

five-month highs on Wednesday, boosted by the retail sector as

Next highlighted a good day for earnings with a strong

quarterly report.

Britain's second-biggest clothing retailer rose 4.7 percent

after it raised its 2013 profit guidance and third-quarter sales

came in a touch above expectations. The sector

outpaced all others on the FTSE 100 index, rising 1.6 percent.

"Earnings thus far we are pleased with as forward-looking

estimates edge up," Atif Latif, director of trading at Guardian

Stockbrokers, said.

"Into the year-end we remain confident that higher equity

markets will continue. Given the lack of available yield from

fixed income, equities remain the best asset class for

investors."

The FTSE 100 was up 0.1 percent, at 6,780.92 points

by 1518 GMT, set for its fifth successive day of gains and

hitting its highest levels since May.

However, the market pared earlier strong gains after the

opening of U.S. markets, which were flat ahead of the outcome of

a two-day U.S. Federal Reserve policy meeting.

The expectation that the Fed will maintain current levels of

asset purchases in its announcement after Wednesday's close

helped support the FTSE near its May high, which itself was the

highest level for the index in 13 years.

Barclays also benefited from better earnings,

advancing 1.2 percent after underlying pretax profits beat

forecasts.

"Generally speaking our clients are favouring the banks, as

they like the cyclical story," Matt Basi, head of sales trading

at CMC Markets, said, although he was cautious over risks that

remain in the sector. Among those, he cited an investigation,

which Barclays said it was co-operating with, into possible

manipulation of currency trading

"Barclays have written down a smaller amount than some were

expecting ... but I'm not quite sure what to make of potential

bad news to come."

Overall, financials were mixed, and insurer Standard Life (LSE: SL.L - news)

was the top FTSE faller, down 3.6 percent after new

business and asset growth for the third quarter fell short of

forecasts

Around 53 percent of companies on the pan-European STOXX 600

index that have reported results so far have beaten or

met market expectations, Thomson Reuters Starmine data showed.

(Editing by Stephen Nisbet)