Upbeat earnings hoist Britain's FTSE to 7-1/2 week high

* FTSE 100 index gains 1 pct

* BP up; raises dividend, promises more share buybacks

* St. James's Place gains on positive update

* Shire hit by fading bid hopes; traders say buy on dips (Updates prices)

By Tricia Wright

LONDON, April 29 (Reuters) - Britain's blue chip shares hita 7-1/2 week closing high on Tuesday, bolstered by upbeatcorporate earnings reports from oil major BP and wealth managerSt. James's Place.

BP, up 2.9 percent, contributed most points to the UKbenchmark index as it raised its quarterly dividend and saidmore share buybacks were on the cards. St. James's Place, which said it got off to a strong start in 2014,advanced 2 percent.

"Investors are waiting to see the start of some positiveearnings momentum, which has been missing in recent years. Anysign of a positive momentum is likely to support share prices,"James Butterfill, global equity strategist at Coutts, said.

The FTSE 100 ended up 69.75 points, or 1 percent, at6,769.91 points, its highest close since March 6.

Barclays Capital analyst Lynnden Branigan said that theclose above 6,706, the level which marked the top of the rangein recent weeks, could pave the way for the index to rise to thehigh seen on March 4, at 6,827.

Shire, the top blue-chip percentage gainer for muchof the session, turned negative in afternoon trade. Tradersattributed the turnaround to a report that Botox-maker Allergan, which had been rumoured to be interested in buying theBritish drugmaker, is instead looking to sell itself.

Allergan is exploring a sale to Sanofi or Johnson& Johnson in order to fend off a takeover bid byValeant, Bloomberg reported, citing people with knowledge of thematter. This would rule out a purchase of Shire.

But traders remained bullish on Shire, up about 15 percentover the last two weeks on speculation it has been rebuffingapproaches from U.S. rivals such as Allergan, alongside a burstof deal-making and bids in the healthcare industry.

Its shares, which tested record highs hit in March earlierin the session, fell 0.7 percent.

"I think any dip's going to be short-lived because thesector's quite interesting at the moment," said Manoj Ladwa,head of trading at TJM Partners. (Additional reporting by Atul Prakash and Alistair Smout;Editing by Ruth Pitchford)