Britain's FTSE edges up; set for best month in seven

* FTSE up 0.1 percent

* Three-week rally put market near all-time highs

* Old Mutual (Other OTC: ODMTY – news) the latest upbeat earnings report

* Pearson (NYSE: PSO – news) issues profit warning

By Joshua Franklin

LONDON, Feb 28 (Reuters) – Britain’s top share index made slight gains on Friday and looked likely to post its best month in seven, after a three-week rally that raised it within touching distance of its all-time high.

After hitting a 2014 low in early February, shares rallied strongly. The 4.7 percent gain posted so far this month would make it the best February in 15 years, leaving the FTSE 100 around 2 percent below its peak, reached in 1999.

“It’s been a global rebound from deeply oversold levels,” said Gerard Lane, equity strategist at Shore Capital, who cautioned the rally could soon run out of momentum. “I think the market will go up but I think it’s getting to a valuation which is aggressive.”

Also supporting the recent upturn has been a decent earnings season. Some 69 percent of companies that have reported quarterly earnings so far have beaten or met expectations.

On the day, the FTSE 100 was up 6.55 points, or 0.1 percent, at 6,816.82 at 1555 GMT. The blue-chip index was led higher along with other European equities by U.S stocks, with some positive economic data boosting the S&P 500 to a record for a second straight day.

Financial services group Old Mutual was the FTSE’s top riser, up 6.1 percent, after it posted 15 percent growth in earnings on a constant-currency basis.

British bookmaker William Hill (Other OTC: WIMHF – news) also helped the market higher, rising 5.7 percent after it said it would cut costs by up to 20 million pounds ($ 33.34 million) in 2015.

Holding back the gains, Pearson fell 6.8 percent after warning it expected earnings to drop in 2014. The publisher reported results within the range of already lowered forecasts caused by a deteriorating U.S. education market. It was the day’s most heavily traded stock, with volumes more than three times its 90-day average.

“They’re pretty awful figures. They’re trying to rebuild around this U.S. education division, which has caused a real weakness here,” ETX Capital head of trading Joe Rundle said.

“I wouldn’t want to be long. They’re betting on a losing horse. They don’t have the scale to compete in this industry.”

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