Britain's FTSE 100 rises, shakes off weaker commodity stocks

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* FTSE 100 up 0.2 pct

* Energy stocks, banks weigh

* BP down after Deepwater charge

* JD Sports jumps after update

By Kit Rees

LONDON, Jan 16 (Reuters) - The UK's top share index edged higher on Tuesday thanks to a fall in sterling, though weaker commodity stocks kept gains in check.

The blue chip FTSE 100 index was up 0.2 percent at 7,785.61 points by 1000 GMT, slightly underperforming the broader European market.

Heavyweight commodity stocks weighed on the FTSE, with shares in BP down 1.5 percent after the energy company said it would take a charge of around $1.7 billion in its fourth quarter results as part of the settlement of the 2010 Deepwater Horizon spill in the United States.

Weaker Brent crude prices also weighed on the energy sector, while a slide in copper prices pulled shares in BHP Billiton (NYSE: BBL - news) , Glencore (Frankfurt: 8GC.F - news) , Rio Tinto (Hanover: CRA1.HA - news) and Anglo American (LSE: AAL.L - news) between 0.9 to 1.3 percent lower.

"It's certainly not a risk-on rally," Mike van Dulken, head of research at Accendo Markets, said.

"We're not seeing any real bullish driver to drive us markedly higher, so people are happy to rotate into the more defensive ... names, and a lot of them are heavyweights, so that bids up the index," van Dulken added.

Shares (Berlin: DI6.BE - news) in Primark-owner Associated British Foods (LSE: ABF.L - news) advanced 1.4 percent on the back of a Barclays (LSE: BARC.L - news) upgrade to "overweight" from "equal weight", with analysts saying that in five to 10 years they believe Primark can build a U.S. business the size of its European business today.

While moves among single stocks were otherwise relatively muted among blue chips, British mid caps were led 0.2 percent higher by JD Sports.

The sports apparel retailer saw its shares jump more than 6 percent higher after it raised its guidance following a strong performance in the Christmas trading period.

Investors have been keeping a close eye on how UK retailers have fared over the festive season for signs of which firms are weathering a slowdown in consumer spending.

UK data showed that inflation fell back for the first time since June, suggesting the squeeze on households could ease slightly.

Sterling fell following the data release, and in turn boosted the FTSE 100 into positive territory.

Among fallers, shares in Provident Financial (Other OTC: FPLPF - news) slipped more than 4 percent after the subprime lender said it expected to report a loss of about 120 million pounds ($165.49 million) at its consumer credit division, at the upper end of its guidance.

Provident's shares remain down nearly 70 percent since a profit warning issued last June.

(Reporting by Kit Rees; Editing by Janet Lawrence)