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* FTSE 100 up 0.7 pct
* Precious metals miners slump
* Banks rally after Fed rate hike
* Centrica jumps after lifting earnings
By Kit Rees
LONDON, Dec 15 (Reuters) - UK shares rose on Thursday,helped by stronger banking stocks and Centrica, althoughmining companies fell after the U.S. Federal Reserve raisedinterest rates.
The blue chip FTSE 100 index ended up 0.7 percent.
The Fed hiked interest rates by 25 basis points on Wednesdayand signalled an accelerated pace of increases in 2017.
The move weighed on shares of precious metals minersFresnillo and Randgold Resources, among thebiggest fallers on the blue chip index, down 5.5 percent and 7.9percent respectively after the price of gold fell to its lowestin over 10 months because of a firmer dollar.
Similarly shares in miners Antofagasta, BHPBilliton, Anglo American and Glencore came under pressure from dollar strength, which makes the costof greenback-denominated underlying commodities more expensiveto holders of foreign currency.
UK banks, however, rose, with the FTSE 350 banking index up 2 percent, and Royal Bank of Scotland and Barclays the biggest risers, up 4.4 percent and 3.4percent respectively.
A U.S. rate increase is considered a positive for banks,which have struggled in a low-rate environment.
"Rising interest rates are generally quite good for banks,depending on their specific situation, but in general they aresitting on large deposit bases and they can make a bigger spreadas interest rates go up," Simon Gergel, CIO of UK Equities atAllianz, said.
Centrica was the biggest riser on the blue chipindex, gaining 5.6 percent and touching a 2-month high after theutility lifted its full-year guidance on better-than-expectedcost savings and a strong trading performance in a volatilemarket.
Among the midcaps, Just Eat The online food delivery company also agreed to buySkipTheDishes in Canada. "Intuitively, we are positive on the transaction,consolidation is a good thing in online marketplace modelswhatever the vertical," analysts at Jefferies said in a note."This deal not only consolidates the UK effectively, it alsoremoves the possibility of a more radical combination for HH(hungryhouse)." ($1 = 0.8064 pounds) (Reporting by Kit Rees; Editing by Janet Lawrence)