* FTSE 100 up 0.5 pct at close
* Reckitt Benckiser takeover news buoys stock
* Aberdeen fund manager sinks on further outflows (Recasts, adds detail, updates prices at close)
By Kit Rees and Helen Reid
LONDON, Feb 2 (Reuters) - Britain's blue-chip FTSE 100 index rose on Thursday, as shares in consumer productsgroup Reckitt Benckiser jumped on M&A-related news andenergy and mining sectors were also strong.
The FTSE 100 closed 0.5 percent higher at 7,140.75points, marking its biggest one-day gain in two weeks. The indexextended gains when sterling reversed course after the Bank ofEngland disappointed bets that interest rates could be hiked bythe end of the year.
A weaker currency benefits the FTSE 100's internationalfirms which dominate the index.
Reckitt Benckiser was the biggest gainer after saying it wasin advanced talks to buy U.S. baby-food maker Mead Johnson.
Its shares rose more than 4 percent and saw their 30-dayaverage daily volume traded in the first 40 minutes of thesession.
"Reckitt Benckiser makes it a brace of companies whose shareprices have defied traditional M&A reaction recently, rising onnews of spending big to acquire," Mike van Dulken, head ofresearch at Accendo Markets, said in a note.
Foodservice company Compass Group gained 3 percentafter maintaining its full-year outlook.
Miners Randgold Resources and Fresnillo also supported the index, up 3 percent and 1.2 percentrespectively as the price of gold also rose.
Shares in oil major Shell climbed 1.3 percentdespite profits missing expectations, as debt reduction effortsand a healthy dividend pleased investors.
"Upstream made a profit two quarters in a row, which willgive people encouragement, and cash flow was strong," added RussMould, investment director at AJ Bell.
Worldpay Group was the worst-performing blue-chipstock, down 2.6 percent after stakeholder Ship Global 2 &CYS.C.A. sold 214 million shares in the online payments company.
Among smaller firms, Aberdeen Asset Management wasdown 3.3 percent after its first-quarter trading update showedoutflows of 10.5 billion pounds, higher than expected.
This marks the 14th consecutive quarter of equity outflowsfor the firm, UBS analysts said.
Energy companies led the small-cap index higher,with oil exploration consultant RPS Group up 12.4percent after it increased its profit outlook. Its shares postedtheir best daily gains since September 2009.
Liberum analysts cited new U.S. President Donald Trump'scommitment to infrastructure spending, and reinitiation of theKeystone XL pipeline project, as positive for RPS, on which ithas a 'buy' rating. (Reporting by Kit Rees and Helen Reid; Editing by Gareth Jones)
