Britain's FTSE recovers from one-week low as miners rally

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* FTSE 100 closes 0.6 pct higher

* Miners track stronger metals prices

* Sainsbury's falls after results

By Kit Rees

LONDON, Sept 28 (Reuters) - Britain's blue-chip share indexbounced back from a one-week low on Wednesday as engineeringfirm Smiths Group surged after postinghigher-than-expected profits and miners tracked stronger metalsprices.

The FTSE 100 index closed 0.6 percent higher at6,849.38 points, in line with a broader rally in European stockmarkets, after falling to a one-week low in the previoussession. It is up nearly 10 percent so far this year.

Smiths Group rose more than 4 percent as improved sales attwo of its units, as well as cost cuts, helped it to beatanalysts' full-year revenue and pre-tax profit forecasts.

"We continue to see an attractive investment thesis inSmiths based on reinvestment for growth," Credit Suisse said."We expect cash generation to remain healthy with lower pensioncontributions and management's clear commitment to furtherworking capital reductions."

Mining companies were the top risers, with the sector index rising 1.4 percent. Rio Tinto, AngloAmerican and BHP Billiton rose between 0.8percent and 2.7 percent as prices of major industrial metalsadvanced.

TUI advanced 1.3 percent after the holiday companylifted its core profit guidance for 2015/16, helped by strongdemand from British tourists and a lower exposure thancompetitor Thomas Cook to Turkey, which has been hit bysecurity fears.

"The TUI results are quite surprising in a way because wehad the opposite story yesterday from Thomas Cook," JasperLawler, analyst at CMC Markets, said.

"TUI, fundamentally, are a German company, so they justdon't have the pound effect weighing on them in quite the sameway that maybe the UK travel firms do," Lawler said.

The FTSE 100 fell in the previous two sessions on worriessurrounding its banking sector. However, RBS' $1.1billion settlement to resolve claims in the United States thatit sold mortgage-backed securities to credit unions did notweigh on its shares, which were up 1 percent.

"This payment had already largely been provided for and soshould not have a material impact on our profit estimates or thegroup's capital position," Gary Greenwood, analyst at ShoreCapital Markets, said in a note.

British grocer Sainsbury fell 3 percent, the worstperformer in the FTSE 100 index, with its shares falling belowits pre-Brexit vote levels after reporting another drop inquarterly underlying sales.

Shares in small-cap company UK Mail soared 43percent after Deutsche Post DHL said it was buyingthe independent British postal operator for 243 million pounds($315 million) to cement its foothold in Europe's three largeste-commerce markets, Britain, Germany and France. (Additional reporting by Atul Prakash; Editing by RuthPitchford)