* FTSE 100 gains 0.5 percent
* Longest winning streak for index since October
* BSkyB firms; Daily Mail highlights bid speculation
By Tricia Wright
LONDON, Dec 27 (Reuters) - Britain's top share index notched up its sixth straight session of gains on Friday, taking its cue from Wall Street which hit fresh all-time highs.
BSkyB advanced 1.6 percent, extending its gains this week to 6.5 percent, as the Daily Mail's market report highlighted growing speculation that Vodafone could launch a bid for the satellite television group to help defend itself against a possible corporate attack from AT&T.
Trading volume in BSkyB was strong, at nearly a third of its 90-day daily average, with the FTSE 100 at under a tenth.
The FTSE 100 was up 30.67 points, or 0.5 percent, at 6,724.84 points by 0914 GMT, with both the Dow Jones and the S&P 500 having scaled record highs on Thursday when the UK market was shut for the Boxing Day holiday.
The UK benchmark's longest winning streak since October, fuelled by optimism the U.S. economy can stand on its own as monetary stimulus is withdrawn, has seen it rise nearly 5 percent from last week's low.
In a fresh positive sign for economic growth in the world's largest economy, U.S. jobless claims fell more than expected on Thursday. This followed robust U.S. durable goods orders data released on Dec. 24.
Traders saw scope for the UK benchmark to continue its ascent into 2014.
"It remains versus historical valuations still undervalued and with the FTSE still lagging behind the EU markets we see relative outperformance into the first quarter of 2014," said Atif Latif, director of trading at Guardian Stockbrokers.
The FTSE 100 trades on a 12-month forward price/earnings ratio of 12.4 times, against its 15-year average of 14.6 times, Thomson Reuters Datastream shows. The index, up some 14 percent in 2013, has lagged a near 17 percent rise on the pan-European STOXX Europe 600.