Sterling slide boosts FTSE 100 while results drive Smiths Group down

* FTSE 100 up 0.7 pct

* easyJet hikes guidance, shares rise

* Smiths Group (Frankfurt: QS2A.F - news) unit hit by EU regulation

* Brexit worries, inflation data hit sterling (Updates prices, adds details, quotes)

By Kit Rees and Helen Reid

LONDON, July 18 (Reuters) - A weaker pound helped Britain's top share index march higher on Wednesday as company earnings took centre stage with Smiths Group suffering.

The blue-chip FTSE 100 index climbed 0.7 percent, in line with a broader rally among European stocks as the second quarter earnings season steps into gear.

Shares (Berlin: DI6.BE - news) in easyJet were among the top gainers, up 2.1 percent, after the budget airline upgraded its full-year guidance and said that profit could jump by as much as 45 percent in 2018.

"The stars are aligning for easyJet this year," Richard Hunter, head of markets at interactive investor, said, highlighting helpful factors such as the demise of some of easyJet's competitors.

However, updates also prompted some large losses.

At the bottom of the index Smiths Group was down 7 percent after the engineering company said it expected full-year revenue at its medical unit to drop due to new EU regulation.

Shares in Royal Mail (LSE: RMG.L - news) slid 4.5 percent as brokers cut their price targets for the company following Tuesday's trading update.

Brexit developments and inflation data weighed on the pound, which in turn gave the FTSE's dollar-earning constituents a boost.

Though Prime Minister Theresa May won a parliamentary vote earlier in the week and kept her Brexit strategy on track, divisions in the party deepened as she threatened Brexit rebels with a general election this summer if they defeated her plans for future customs arrangements.

"The growing lack of trust within the governing party as well as the political splits across the UK parliament are making it increasingly difficult for investors to ascertain a scenario where any agreement, even if one could be reached, would be acceptable to the EU," said Michael Hewson, chief market analyst at CMC Markets UK.

The inflation miss sent sterling lower and also hurt shares in supermarkets Morrisons, Sainsbury (Amsterdam: SJ6.AS - news) 's and Tesco (Frankfurt: 852647 - news) which benefit from higher food prices.

More broadly, miners and financial stocks gave the biggest boost to the index.

BHP Billiton (NYSE: BBL - news) , Glencore (Frankfurt: 8GC.F - news) and Rio Tinto (Hanover: CRA1.HA - news) rose 1.2 to 2.7 percent as metals prices extended their rally.

Brokers have turned more positive on mining stocks, with Citi analysts arguing the trade-driven selloff in the sector is creating an opportunity for investors to buy at reduced valuations.

Deutsche Bank (IOB: 0H7D.IL - news) strategists raised their recommendation on Europe's miners from underweight to overweight, arguing Chinese data is set to rebound and copper prices have further to rise. (Reporting by Kit Rees and Helen Reid Editing by Gareth Jones)