Britain's FTSE closes off highs as utilities shares fall

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* FTSE 100 index closes 0.3 pct higher

* Utilities down on rising bond yields

* Taylor Wimpey gains after update

By Atul Prakash and Kit Rees

LONDON, Nov 14 (Reuters) - Britain's top share index closedhigher on Monday following a rally in banking and mining stocks,although a slump in utilities kept a lid on broader marketgains.

The blue-chip FTSE 100 index closed up 0.34 percent at 6,753.18 points after earlier rising as high as 6,814.19.

Utilities stocks, seen as bond-proxies, were the worst hitby higher bond yields prompted by the risk of faster inflationand wider budget deficits if president-elect Donald Trumppursues a U.S. infrastructure spending spree.

"Selling pressure in bonds will persist following Trump'svictory and his pledge to spend heavily on infrastructureprojects," Secureequity senior trader Jawaid Afsar said. "Itwill continue to prompt a rotation out of defensives intofinancials and miners for some time."

Severn Trent fell 3.8 percent, the worst performerin the FTSE 100 index, while shares in SSE, UnitedUtilities and National Grid dropped by between 2.8and 3.2 percent.

Russian gold and silver miner Polymetal fell 4.9percent following a drop in gold prices.

Banks were in demand on hopes of a relatively lighterregulation in the United States and expectations that a rise ininflation could prompt the U.S. Federal Reserve to be aggressivein raising interest rates.

The UK banking index rose 2.7 percent, helpedby a 2.4 to 5.2 percent rise in shares of Barclays,Royal Bank of Scotland and HSBC.

Miners were also in demand on expectations that Trump'splans to spend $1 trillion in infrastructure projects over adecade could boost demand for metals.

The UK mining index was up 1.6 percent asshares in BHP Billiton, Rio Tinto and AngloAmerican rose 2.3 to 2.8 percent.

Sharp moves in some stocks also supported the market.

Housebuilder Taylor Wimpey climbed 3 percent aftersaying it expected an increase in full-year operating profitmargin, adding that trading had remained resilient followingBritain's vote to leave the European Union.

"Taylor Wimpey's plans for 2016 have not been derailed bythis year's political events and the forward orderbook suggeststhat profits will grow further in 2017," analysts at Jefferiessaid in a note, adding that Taylor Wimpey was their top pickamong the housebuilders they covered.

Support services firm DCC rose 2.8 percent aftersaying it expected full-year profit to come in ahead ofexpectations.

Beyond the blue-chips, Greencore Group rose 9.5percent after saying that it planned to buy U.S. conveniencefood manufacturer Peacock Foods for $747.5 million in a bid totransform its U.S. business. (Editing by Andrew Heavens and Alexander Smith)