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* FTSE 100 gains 0.5 percent
* Longest winning streak for index since October
* BSkyB firms; Daily Mail highlights bid speculation
By Tricia Wright
LONDON, Dec 27 (Reuters) - Britain's top share index notchedup its sixth straight session of gains on Friday, taking its cuefrom Wall Street which hit fresh all-time highs.
BSkyB advanced 1.6 percent, extending its gains thisweek to 6.5 percent, as the Daily Mail's market reporthighlighted growing speculation that Vodafone couldlaunch a bid for the satellite television group to help defenditself against a possible corporate attack from AT&T.
Trading volume in BSkyB was strong, at nearly a third of its90-day daily average, with the FTSE 100 at under a tenth.
The FTSE 100 was up 30.67 points, or 0.5 percent, at6,724.84 points by 0914 GMT, with both the Dow Jones andthe S&P 500 having scaled record highs on Thursday whenthe UK market was shut for the Boxing Day holiday.
The UK benchmark's longest winning streak since October,fuelled by optimism the U.S. economy can stand on its own asmonetary stimulus is withdrawn, has seen it rise nearly 5percent from last week's low.
In a fresh positive sign for economic growth in the world'slargest economy, U.S. jobless claims fell more than expected onThursday. This followed robust U.S. durable goods orders datareleased on Dec. 24.
Traders saw scope for the UK benchmark to continue itsascent into 2014.
"It remains versus historical valuations still undervaluedand with the FTSE still lagging behind the EU markets we seerelative outperformance into the first quarter of 2014," saidAtif Latif, director of trading at Guardian Stockbrokers.
The FTSE 100 trades on a 12-month forward price/earningsratio of 12.4 times, against its 15-year average of 14.6 times,Thomson Reuters Datastream shows. The index, up some 14 percentin 2013, has lagged a near 17 percent rise on the pan-EuropeanSTOXX Europe 600.
