* Rise in Lloyds adds most points to FTSE 100
* FTSE up 0.3 pct, Lloyds jumps 4.8 pct on results
* FTSE hovering around 2-month high
* Sainsbury drops 3.8 pct
LONDON, May 1 (Reuters) - Britain's blue chip share index hit its highest level in around two months on Thursday, rising for a fourth straight session and buoyed by gains at Lloyds bank .
The FTSE 100 index was up by 0.3 percent, or 17.91 points, at 6,797.94 points in mid-session trading to hover around its highest level since early March. Trading volumes were relatively thin, with much of Europe closed for the May 1 public holiday.
Shares of part-nationalised bank Lloyds jumped 4.8 percent, adding the most points to the FTSE, after the lender posted a 22 percent rise in first-quarter pre-tax profits.
Lloyds also said it would apply to the Bank of England in the second half to restart dividend payouts.
"Lloyds came out with a solid set of numbers which confirmed a turnaround in their business," said Dafydd Davies, senior trader at Prime Wealth Group.
Davies said his firm had been buying Lloyds shares over the last couple of days and that the stock could rise to around the 90 pence level from current levels just below 80 pence.
British TV and media group BSkyB also rose, by 3.6 percent after adding 74,000 net new TV customers in its third quarter.
Data showing growth in UK manufacturing also supported the market.
"The market is certainly getting help from positive news from several companies, with Lloyds results broadly reflecting a growth in the economy," said Hargreaves Lansdown equity analyst Keith Bowman.
The FTSE 100 hit a peak of 6,867 points in late January, which was close to its highest level since early 2000, but then slipped back due to concerns over a downturn in emerging markets and geopolitical tensions in Ukraine.
A 3.8 percent fall at supermarket retailer Sainsbury prevented the broader market from making bigger gains on Thursday, after brokerage Bernstein reduced its price target on Sainsbury shares.
MB Capital trading director Marcus Bullus said he would look to see if the FTSE could break above the 6,850 point level before adding to "long" positions betting on more gains for the market. (Additional reporting by Atul Prakash; Editing by Susan Fenton)