Miners lift Britain's FTSE into positive territory as BT slumps

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* FTSE 100 index up 0.2 percent

* Miners among top gainers

* BT slumps after profit warning

By Atul Prakash

LONDON, Jan 24 (Reuters) - Britain's top share index rose onTuesday, with a sharp dollar-induced rally in mining companiesoutpacing a slump in BT Group after a profit warning bythe telecoms business.

The blue-chip FTSE 100 index, which touched athree-week low in the previous session, was up 0.2 percent at1040 GMT after the UK Supreme Court ruled that Prime MinisterTheresa May must gain parliament's approval before she beginsBritain's formal exit from the European Union.

"The court ruling is a slap in the face of the Britishgovernment. However, parliament is likely to give its approvaland the Brexit timeline could remain on track," said JawaidAfsar, senior trader at Securequity.

"As far as investors are concerned, one more uncertainty isnow out of the way and they can focus on other things."

Basic resources stocks were in demand, with the UK miningindex climbing 3.9 percent to its highest sincelate 2014 after the dollar traded near its lowest since earlyDecember on concerns that U.S. President Donald Trump is morefocused on protectionism than pro-growth economic policies.

Trump formally withdrew the United States from the PacificRim Trans-Pacific Partnership (TPP) on Monday, distancing theUnited States from its Asian allies.

A weaker dollar makes metals cheaper for holders of othercurrencies and boosts prices of key industrial metals. AngloAmerican, BHP Billiton, Antofagasta,Rio Tinto and Glencore, were the top fivegainers, rising by between 3.6 percent and 5.9 percent.

However, the index's advance was capped by a sharp fall inBT after it cut revenue, earnings and cashflow forecasts for thenext two years, citing the discovery that improper accounting atits Italian business went far deeper than previously thought.Shares in the company dropped more than 17 percent to 315pence.

"The revelation that accounting deficiencies in Italy areworse than previously thought is a bitter and, needless to say,unwelcome pill to swallow for BT investors," said HargreavesLansdown analyst George Salmon.

"With news that its Business and Public Sector division iscoming under pressure, too, worries about the group's ability tofund its generous dividend policy will surely grow."

BT's shares were on track for their biggest one-daypercentage loss since late 2008.

Elsewhere, easyJet fell by 7.5 percent after thebudget airline said that a weaker pound and higher fuel priceswould hit profit more than expected this year.

(Editing by David Goodman)