UPDATE 2-Miners boost FTSE 100; M&A activity pushes mid-caps to record highs

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* Meggitt tops mid-cap index on takeover deal

* Senior gains on strong first-half earnings

* FTSE 100 up 0.7%, FTSE 250 adds 1.1%
(Updates to close)

By Shashank Nayar and Amal S

Aug 2 (Reuters) - London's FTSE 100 ended higher on Monday,
led by gains in mining stocks, while a slew of mergers and
acquisitions activity helped push mid-cap stocks to record
peaks.

The FTSE 100 rose 0.7%, led by base metal miners
with Anglo American, Rio Tinto,
Antofagasta, BHP Group gaining between 1.08%
and 3.48%.

The domestically focussed mid-cap index climbed 1.1%
to record highs, led by defence and aerospace company Meggitt
and asset management services provider Sanne Group
on takeover deals.

Meggitt surged 56.7% on a 6.3 billion pound takeover offer
from U.S. industrial firm Parker-Hannifin, while Sanne Group
jumped 7.6% on a $2 billion offer from Apex.

"UK stocks have long been considered cheap and this year's
M&A spree shows that overseas investors have finally got enough
confidence to pounce on opportunities after years of showing
little interest in the market," said Russ Mould, investment
director at AJ Bell.

The FTSE 100 has gained 9.6% so far this year and is nearly
9.7% away from its record high, supported by the reopening of
the economy and strong earnings.

However, it has largely underperformed its mid-cap and
European peers and currently trades at the cheapest valuation
among its peers, weighed by concerns around rising inflation and
surging coronavirus cases.

Meanwhile, a leading think tank National Institute of
Economic and Social Research forecast the British consumer price
inflation will reach 3.9% early next year, almost double the
Bank of England's target, but should fall back to 2% the year
after if the BoE begins to raise interest rates.

Britain's SSE gained 1.3% after it said it would
sell its 33.3% stake in gas distribution operator Scotia Gas
Networks for 1.225 billion pounds ($1.70 billion).

In earnings, British jet and auto parts supplier Senior Plc
rose 9.3% after it reported a first-half profit and kept
its annual outlook unchanged.

HSBC Holdings fell 0.3% even after it beat
forecasts with first-half pretax profit that more than doubled
from last year when it set aside $7 billion to cover
pandemic-related bad loans.

(Reporting by Shashank Nayar and Amal S in Bengaluru; Editing
by Subhranshu Sahu and Emelia Sithole-Matarise)