* FTSE up 0.2 percent
* BP rises after spill report, analysts upbeat
* ARM surges on Microsoft link-up
By David Brett
LONDON, Jan 6 (Reuters) - Mining stocks and BP helped Britain's top share index higher on Thursday as equities remained investors' preferred asset class, with ARM Holdings the top riser after Microsoft Corp confirmed a tie up British chipmaker.
By 0905 GMT, the FTSE 100 was up 14.56 points, or 0.2 percent at 6,058.42 extending gains into a third consecutive day having closed up 0.5 percent Wednesday.
London's blue chips have so far put on more than 2.5 percent in the first three trading days of 2011.
"Equities are the only game in town. They are the only asset class you can can back with any degree of comfort at the moment," David Buik, senior partner at BGC Capital, said.
"The bond market is in turmoil. You might make a fortune but you could do your brains. With the threat of sovereign debt, inflation and possible rising interest rates at the end of the year, why get involved?"
Better-than-expected employment figures from the U.S. on Wednesday indicated the recovery in the world's largest economy was gathering pace, further spurring sentiment.
Miners, which missed out on the rally in the previous session played catch-up, with Randgold Resources up 3.7 percent, boosted by an upgrade to "buy" from "hold" by Citigroup.
However, Antofagasta fell 0.8 percent, weighed on by Nomura's double-downgrade on the copper miner to "reduce" from "buy".
BP lent its weight to FTSE gains, up 1.8 percent, as the oil major and Transocean shrugged off a scathing report from a U.S. Presidential panel which blamed the United States' worst ever oil spill on risky decisions the companies made.
Evolution Securities said the report "supports our view that a gross negligence case against BP looks hard to prove and could ultimately reduce BP's liabilities."
ARM GAINS ON ALLIANCE
ARM Holdings, which is up more than 13 percent so far in 2011, having risen 138 percent in 2010, gained 9.9 percent after U.S. firm Microsoft Corp announced it was linking up with the British chipmaker to take on Apple Inc in the red-hot tablet and smartphone arena.
"While expected (we estimated c.25 percent share price move up is attributable to this long awaited deal), we view this as a very positive (deal) long term for ARM," UBS said in a note.
Investors cheered Rolls-Royce, up 2.5 percent after the engine maker completed contracts worth 5 billion pounds with British Airways for its Trent engines, which will be used to power up to 61 new wide-body aircraft.
On the downside, banks gave up some of Wednesday's gains as the sector paused for breath.
British testing firm Intertek was the top blue chip faller, down 1.4 percent after Exane BNP Paribas cut its rating on the company to "neutral" from "outperform".
Among the mid caps, retailers struggled with McBride and Mothercare the top fallers, down 7.1 and 5.0 after respective downbeat trading updates.
On the domestic economic data front, investors were waiting for December Markit/CIPS Services PMI, due at 0928 GMT. (Editing by Hans Peters)