* FTSE 100 up 0.4 pct

* Troubled RSA lifted by turnaround optimism

* Charts bullish for FTSE; Guardian targets 6,775

By Tricia Wright

LONDON, Feb 17 (Reuters) – Britain’s top shares advanced on Monday, with RSA among the biggest risers as investors welcomed signs that turnaround plans are afoot at the troubled insurer.

RSA climbed 1.8 percent after Sky News reported that the company, which is reeling from an accounting scandal at its Irish division, is looking for prospective buyers for one of its Canadian businesses which could help it raise as much as 200 million pounds ($ 335 million).

RSA has previously said it was considering all options to raise capital that could include the sale of business units.

The Financial Times said RSA was sounding out institutional investors to raise as much as 350 million pounds in a share placing that would allow it to avoid a rights issue.

Citing people familiar with the matter, the newspaper said Stephen Hester – the former RBS (LSE: RBS.L – news) chief who was hired to lead RSA earlier this month – had approached top institutional investors to win their support for a share placing.

“You’re going to see a raft of ‘get your house in order’ news as he comes in, and that should be positive for the stock as he’s got a proven track record of turning (things) around,” Joe Rundle, head of trading at ETX Capital, said.

“It’s addressing the issues that were inherent from before and once it sorts them out, it’s a good company.”

The FTSE 100 was up 27.83 points, or 0.4 percent, at 6,691.45 points by 0909 GMT.

The index, up around 4 percent from its February lows, has recouped more than half of what it lost during the recent emerging markets sell-off.

It climbed above its 50-day moving average last week, a technical signal which suggested underlying support from buyers.

“The FTSE remains in an uptrend and we continue to see the market pushing higher,” said Atif Latif, director of trading at Guardian Stockbrokers, who saw scope for the index to test 6,775, followed by a move up to 6,867.

He considered the FTSE 100 to be attractive from a valuation perspective. The index, currently trading on a 12-month forward price/earnings ratio of 12.6 times, is well below its 15-year average of 14.5 times, Thomson Reuters Datastream shows.

Gold miner Randgold Resources (Dusseldorf: RGR1.DU – news) firmed 1.7 percent as the gold price hit a 3-1/2 month peak on Monday, and with traders also citing a Citi upgrade to “neutral” on valuation grounds as behind the share price rise.