Britain's FTSE supported by positive company updates

* FTSE 100 closes 0.2 pct higher

* GKN rises after confident full-year outlook

* BT Group up on Ofcom relief

* Housebuilders down on price target cuts

By Kit Rees

LONDON, July 26 (Reuters) - Britain's top share index endedslightly higher on Tuesday, driven by gains in lender ProvidentFinancial engineering firm GKN and BT,though housebuilders fell after a series of price target cuts.

The blue chip FTSE 100 index closed 0.2 percenthigher at 6,724.03 points. The index is up about 16 percentsince a post-Brexit slump, but is up only 12 percent in dollarterms because of a sharp decline in the sterling.

The market was underpinned by a rise in basic resourcesstocks after recent sharp losses, with the UK mining index gaining about 2 percent.

The FTSE 100 index was also helped by several individualcompanies. Shares in Provident Financial surged 5.7 percent, thetop gainer in the FTSE 100 index, after saying that its firsthalf adjusted pre-tax profit jumped 17.6 percent.

Engineering firm GKN was also among the top risers, up 3.8percent, after sticking to a forecast for 2016 to be anotheryear of growth. It also said it would aim to cut costs by 30million pounds ($39.32 million) to help boost next year'sresult.

"Staying on course and delivering on guidance (before FX)strikes us as pretty good going given the number of ebbs andflows across each division, although it is precisely what GKNhas done for at least the last three years," Sandy Morris,equity analyst at Jefferies said in a note.

"We believe 2016 will not - as GKN guided - be a vintageyear in terms of organic growth, but the things that need tohappen to position GKN for good organic growth from 2017 appearto be slotting into place."

Telecoms company BT Group rose 3.1 percent after Ofcom didnot recommend breaking up the company. Instead, the Britishregulator said that BT's network division Openreach should berun as a separate company within the telecoms group.

"Avoidance of the worst-case outcome may be a relief forinvestors and the underperformance of the BT share price inrecent months may imply that concerns over governance atOpenreach may be at least partially priced in," Polo Tang, Headof Telecom Research at UBS, said in a note.

Housebuilders, however, were the biggest laggards, withTaylor Wimpey, Berkeley Group, BarrattDevelopments and Persimmon all down between 2.5percent to 3.3 percent after Deutsche Bank cut its price targeton all four stocks, citing Brexit uncertainty for a reduction intheir forecasts for the sector.

Oil major BP was down 1.3 percent after missing itsquarterly profit expectations due to weak refining margins andoil prices. The oil company also cut its 2016 investment budgetto below $17 billion.

Outside of the blue chips, Virgin Money jumped over 8percent after reporting a rise in half-year underlying pretaxprofit. (Additional reporting by Atul Prakash; Editing by RaissaKasolowsky)