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* FTSE 100 index closes up 1.5 percent
* Index has risen on first day of 16 of past 18 months-BTIG
* Coutts estimates fair value at 6,550 vs current 6,266
* Volumes light at 84 pct of 90-day daily average
By Toni Vorobyova
LONDON, July 1 Britain's top share index rose on Monday, with strong domestic and global data encouraging fresh bets on industrial and construction stocks on the first day of the new quarter.
Building materials supplier Travis Perkins - promoted to the FTSE 100 last month - and DIY retailer Kingfisher benefited from signs of a pick-up in the housing market, with mortgage approvals at a 3-1/2 year high in May and house prices on the rise.
Meanwhile, news that Britain's manufacturing sector grew at its fastest pace in two years last month, helped boost companies such as Melrose, which added 4.5 percent, and BAE Systems, which rose 3.8 percent.
Solid U.S. manufacturing data from the Institute for Supply Management also offered some reassurance about the health of the world's biggest economy, while a weak employment index signalled that the Federal Reserve may yet keep its stimulus programme in place for some time to come.
The strong data helped support energy and metal prices, boosting the FTSE's first and third biggest sectors.
"Some people would put it down to the first trading day of the month, but I think there is probably a bit more to it," said Zeg Choudhry, head of equities trading at Northland Capital Partners. "We had some decent data, gold bouncing off its low and ... the miners have done quite well today which should give investors a bit more confidence to come back."
The FTSE 100 gained 92.31 points, or 1.5 percent, to 6,307.78 points, recovering poise after a 5.6 percent drop in June, its first monthly fall in over a year.
The British benchmark has posted gains on the first day of 16 out of the last 18 months, according to research from BTIG.
Analysts at Coutts said signs of improvement in the British economy, coupled with a bottoming out in top trading partner euro zone, boded well for the FTSE 100.
"We estimate the fair value of the FTSE 100 to be 6,550 - suggesting plenty of room to grow from current levels."
Technical charts also suggested some scope for optimism on the British stock market, with the 200-day moving average providing strong support, and analysts saying the market should have a fairly smooth ride up until resistance around 6,400.
Volumes, however, were light - at around 84 percent of the 90-day daily average - underscoring concerns about the longevity of the rebound during the historically volatile summer months.
"Heading in to July and August - generally not great months, when volumes tend to fall off a bit - I am defensively long and I would look at shorting the FTSE to balance that off," said Dan Reed, head of CFD trading at Beaufort Securities. (Editing by Toby Chopra)