Vodafone nudges Britain's FTSE 100 index higher

* FTSE 100 edges up 0.2 pct, eyes last week's 5-month high

* Vodafone rise adds most points to FTSE 100 index

* Vodafone lifted by bid speculation

By Sudip Kar-Gupta

LONDON, Nov 6 (Reuters) - Britain's benchmark equity index edged higher on Wednesday, buoyed by Vodafone as merger speculation lifted the telecoms group and helped push the market back towards five-month highs.

Some traders said the UK stock market may not make much ground in November as some investors look to sell equities in order to cash in profits after a rise in October, although most still expected the market to rally into the end of 2013.

"We've had a great rise but we could enter into a phase of controlled consolidation in November," said APS Alpha technical strategist Adrian Slack.

The blue-chip FTSE 100 index was up by 0.2 percent, or 11.04 points, at 6,757.88 points in mid-session trade - edging back near last week's peak of 6,819.86 points, which was the highest since June.

Vodafone rose 0.9 percent to add the most points to the FTSE 100, as analysts at brokerage Bernstein increased their price target on Vodafone on the back of speculation of a possible merger with American peer AT&T (NYSE: T - news) .

Vodafone sold its stake in Verizon Wireless (VZW) to its joint venture partner Verizon Communications Inc (LSE: VZC.L - news) for $130 billion in September, leaving it with a pan-European business spanning Britain to Romania and operations in the Middle East and Africa.

AT&T has had an eye on Europe since the beginning of the year and has considered options including Vodafone, sector bankers have previously told Reuters.

"Operationally and strategically, both AT&T and Vodafone are experiencing a rough patch. The possible mega merger between the two that could be a welcome distraction for both appears to have the same momentum as the VZW/Vodafone deal earlier this year," Bernstein wrote in a note.

The FTSE 100, which hit a 13-year high of 6,875.62 points in late May, is up by around 15 percent since the start of 2013.

APS Alpha's Slack said any pullback in November could push the index down to 6,600 but he felt this would then be followed by a rally in December that could see the index end 2013 around 6,900. (Additional reporting by Toni Vorobyova; Editing by Hugh Lawson (Other OTC: LWSOF - news) )