FTSE flat as BT gains offset by commodity stocks

* BT gains; cost cuts help it raise guidance

* Pharma stocks in demand; UBS lifts GSK's target

* Energy stocks weaker as crude slips

By Tricia Wright

LONDON, Nov 12 (Reuters) - Britain's top share index was flat early on Thursday, as investors cheered BT Group's (BT.L) second-quarter results, offsetting weakness in energy stocks and miners.

At 0913 GMT, the FTSE 100 .FTSE was up 0.47 points at 5267.22. The index ended 0.7 percent higher on Wednesday, having touched an intraday high at a level not seen since September 2008, after a jump in Chinese factory growth and reassuring signals on the UK economy.

"Investors are still digesting comments from the Bank of England in its inflation report yesterday, and maybe the figures we had out of China are still blowing through the market, said Keith Bowman, analyst at Hargreaves Lansdown.

"BT's figures have been well received, certainly at the top end of expectations, and I think that's aiding sentiment as well," he said.

Telecoms notched up good gains in the wake of BT Group's second-quarter results. BT added 3.8 percent, while Cable & Wireless (CW.L) rose 1.6 percent.

BT increased its revenue and dividend forecast for the full year after stringent cost cuts helped the former telecoms monopoly to beat second quarter core earnings expectations. [ID:nLB181504]

Drug stocks found favour, as investors' appetite for risk ebbed and flowed. GlaxoSmithKline (GSK.L) rose 1.2 percent, helped by a target price hike from UBS, and with Barclays Capital initiating coverage on the firm with an "equal-weight" rating.

AstraZeneca (AZN.L), which Barclays also started as "equal-weight", put on 0.6 percent. The same broker started the European pharma sector with a "neutral" rating.

British Airways (BAY.L) rose 2 percent after Britain's Sky News reported that BA and Spanish airline Iberia (IBLA.MC) could announce a merger agreement as early as this week, citing unidentified sources. [ID:nLC394135]

Strength was seen among banks, in the wake of the previous session's gains which were aided by the upbeat UK economic news.

Lloyds Banking Group (LLOY.L) rose 1.1 percent and Standard Chartered (STAN.L) was 0.2 percent firmer.

Barclays (BARC.L), up 1 percent, rebounded from falls seen since its third-quarter trading update on Tuesday, as Morgan Stanley and ING both lifted their price targets for the firm.

Energy stocks were under pressure as the crude price CLc1 dipped 0.1 percent, with BG Group (BG.L), BP (BP.L) and Royal Dutch Shell (RDSa.L) falling 0.3 to 0.5 percent.

Miners were out of favour, reversing Wednesday's advance which was underpinned by the Chinese economic data, with Fresnillo (FRES.L), BHP Billiton (BLT.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) dropping 0.1 to 0.9 percent.

Eurasian Natural Resources (ENRC.L) fell 0.3 percent after releasing third-quarter output numbers. [ID:nLC367843]

Among individual movers, 3i Group (III.L) shed 3.7 percent in the wake of its first-half results. The British private equity firm said asset values increased just 2 percent in the first half of its financial year as the real economy failed to keep up with rebounding stock markets. [ID:nLB267369]

Investors' attention will be drawn across the Atlantic later in the day, to U.S. weekly jobless claims, due at 1330 GMT. (Editing by Hans Peters)