UK's FTSE 100 and FTSE 250 equity indexes rise, Sky and ITV outperform

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* ITV, Sky lifted by AT&T/Time Warner proposed deal

* Cobham slumps after issuing profit warning

By Sudip Kar-Gupta

LONDON, Oct 24 (Reuters) - Britain's top shares index roseon Monday to move back within sight of a record high reachedearlier this month, with media stocks outperforming in the wakeof AT&T and Time Warner's planned blockbuster deal.

The blue-chip FTSE 100 index was up 0.3 percent at7,037.69 points, close to a record high of 7,129.83 pointsreached on Oct. 11.

The FTSE 250 mid-cap index also advanced by 0.2percent.

TV and media company ITV rose 1.9 percent whilerival Sky also climbed around 1 percent, after AT&T's planned $85 billion takeover of Time Warner raisedthe prospect of similar consolidation in Europe.

ITV has been the subject of bid speculation involvingEuropean cable operator Liberty Global.

In July 2015, Liberty Global said it had raised its stake inITV to 9.9 percent but added it had intention of taking overITV.

"The AT&T/Time Warner deal faces regulatory scrutiny, butthe deal is nevertheless raising the possibility of similarsector consolidation within Europe," said Beaufort Securities'sales trader Basil Petrides.

Provident Financial also rose after Goldman Sachsraised its price target on the stock, while budget airlineeasyJet climbed after UBS upgraded it to "buy" from"neutral".

However, Royal Bank of Scotland fell after Investecdowngraded RBS to "sell" from "hold", while aerospace anddefence company Cobham also slumped nearly 20 percentafter Cobham issued its second profit warning in six months.

The blue-chip FTSE 100 index is up around 13 percent sincethe start of 2016, but down by around 7 percent in U.S. dollarterms, due to a slump in sterling caused by Britain's shock"Brexit" vote in June to quit the European Union.

The fall in sterling has given a boost to many of the FTSE100's international companies which earn much of their revenuesin U.S. dollars, and therefore get a currency-related accountinglift as those dollars are converted back to pounds.

However, the drop in the U.S. dollar value of FTSE 100stocks is a potential negative for overseas investors for whomthe dollar is their benchmark currency reference. (Editing by Jon Boyle)