* FTSE set for strongest quarter since index started in 1984
* Life insurers strong on M&A speculation
* Miners rally after lagging recently
By David Brett
LONDON, Sept 30 (Reuters) - Britain's leading share index rose 0.2 percent in early trade on Wednesday, the last session of a strong quarter led by gains in miners and life assurers, which outweighed falls in banks and defensives.
By 0823 GMT the FTSE 100 was 9.25 points higher at 5,168.97, having ended Tuesday's session 0.1 percent lower.
Hefty gains over the course of the summer have seen UK blue chips rally 21.4 percent in the three months to September, the FTSE 100's best quarterly performance since the index was launched in 1984.
The index is still down 4.7 percent from just over a year ago, before the collapse of Lehman Brothers.
"We're ticking higher on the last day of a strong quarter but investors remain a touch cautious ahead of the start of October, always a volatile month, and Friday's U.S. jobs report," said Mic Mills, senior trader at ETX Capital.
Life insurers were again in demand with the sector high on traders' wanted lists on the back of M&A speculation.
Legal and General was a top FTSE 100 riser, up 5.1 percent following recent reports the firm could be a target for a number of firms and as Deutsche Bank raised its recommendation on the company to "hold" from "sell".
Aviva, Prudential, Standard Life and Old Mutual also rallied between 1.6 and 4.6 percent, underpinned by Deutsche Bank's positive note on European life insurers.
Among other financials, Man Group, the world's largest listed hedge fund firm, rose 5.5 percent after it said currency movements and slowing outflows lifted funds under management to an estimated $43.8 billion at end-September, at the top end of forecasts.
Schroders, London Stock Exchange and 3I Group also gained, up 0.2 to 0.6 percent.
Heavyweight miners were also good gainers having lagged in Tuesday's session. Lonmin, Randgold Resources, Anglo American, Xstrata and Rio Tinto added 0.4 to 1.5 percent.
Software firm Sage Group climbed 3.2 percent after Morgan Stanley upgraded its stance on the stock to "overweight" from "equal-weight" as it turns to stock picking in the technology sector for what it describes as the next leg of recovery.
OILS, BANKS WEIGH
Oils were mainly lower in response to demand concerns after weak U.S. consumer confidence data on Tuesday as crude prices steadied above $67 a barrel on the back of a weak dollar.
BP fell 0.7 percent, while Royal Dutch Shell and Tullow Oil shed 0.4 and 0.6 percent respectively.
BP said its 137,000 barrels-per-day Kwinana oil refinery in Australia has been partially shut down since Monday due to a technical failure.
Banks were weighed down by falls from heavyweight HSBC, down 0.6 percent, while Standard Chartered shed 0.1 percent.
Their falls more than offset gains for RBS, Lloyds Banking Group and Barclays, which were up 0.1 to 1.5 percent.
Vodafone lost 1 percent, extending the previous session's falls after the world's largest mobile operator was told it could not begin selling Apple's iPhone until after Christmas.
On the data front, British consumer morale saw its biggest one-month jump since 1995 in September to notch its highest level since January 2008, the GfK/NOP consumer confidence barometer showed on Wednesday.
U.S. indices will look to bounce back after being hit by unexpected disappointing consumer confidence figures on Tuesday.
Attention this afternoon will turn to the final reading of the GDP data for the United States in the second quarter at 1230 GMT, which is expected to show that the economy shrank at an annualised rate of 1.2 percent.
Meanwhile U.S. ADP employment figures for September, due at 1215 GMT, are expected to show a drop of 210,000. (Editing by Hans Peters)