* FTSE up 0.2 percent, equity valuation cheap historically
* Reckitt gains on BofA ML upgrade
* BP hurt by Rosneft deal woe
By David Brett
LONDON, March 25 (Reuters) - Britain's top share index climbed higher on Friday, as historically cheap valuations fuelled investor desire for equities, but BP fell after its tie-up with Russia Rosneft was dealt a serious blow.
By 0900 GMT, the FTSE 100 was 13.75 points or 0.2 percent higher at 5,894.62, after London's blue chips rallied 1.5 percent at 5,880.87 on Thursday to levels last seen prior to Japan's devastating earthquake.
Traders said the bullish sentiment over equities and their attractive valuations remained a factor after a recent swathe of bullish broker comment.
The FTSE 100 carries a one-year forward price-to-earnings of 9.8 times, a level not seen since September and well below a 10-year average of 14.4, Thomson Reuters Datastream shows.
By comparison, the S&P 500 has a one-year forward P/E of 12.5 times.
Analysts said Thursday's advance had driven the FTSE 100 through the retracement zone to 5,888.70, suggesting that buying is strong at current levels and the rally is not just short traders bailing out.
"A recent top near 6,054.00 appears to be a bona fide target," James Hyerczyk, an analyst at Autochartist said.
"Since this market is being driven by momentum, the first sign of weakness will likely trigger a profit-taking break. The signal to watch for will be a break back into the retracement zone at 5,876.28 to 5,805.39."
Consumer goods group Reckitt Benckiser was the top riser, up 2.7 percent with traders citing an upgrade from Bank of America Merrill Lynch as the catalyst.
BP DEALT ROSNEFT BLOW
BP, however, fell 1 percent after an arbitration panel thwarted a deal between the British oil major and Rosneft, Russia's largest oil firm.
The two companies have been blocked from forming an alliance to explore for oil in the Russian Arctic and executing a $16 billion share swap.
"On the face of it this looks a messy situation and one where we think BP will do well to emerge with all of its investment in TNK-BP, reputation in Russia and Arctic oil deal intact," Citigroup said.
Retailers Next and Kingfisher, each down 0.6, took a breather following sharp gains post results in the previous session.
Invensys, however, rebounded 1.6 percent following sharp falls on Thursday when the engineering firm ousted its chief executive Ulf Henriksson.
"The share price reaction was overdone yesterday," one London-based trader said, noting also that light volumes were also contributing to its early rally.
Precious metal miner African Barrik Gold rose 3.5 percent as Citigroup upgraded its rating to reflect the lack of political challenges facing the company given political developments in North Africa and Gulf states.
Sainsbury added 1.6 percent as Natixis upgraded the food retailer to "neutral" from "reduce". (Additional reporting by Dominic Lau and Tricia Wright; Editing by David Holmes)