* Blue-chip index closes 0.3 pct higher
* 3i gains on positive earnings update
* Sainsbury and GlaxoSmithKline down
By Atul Prakash
LONDON, May 14 (Reuters) - Britain's FTSE 100 index ended higher on Thursday, with encouraging updates from companies such as 3i Group supporting the broader stock market.
Private-equity group 3i rose 3 percent, the biggest gain in the FTSE 100, after it reached the end of a three-year restructuring with strong earnings growth at its portfolio companies.
"The group remains cautious about the current environment given high financial market valuations and increased currency volatility. However it looks forward with confidence, with a focus on enhancing the value of the existing investment portfolio," said Nicolas Ziegelasch, head of equity research at Killik & Co.
Merlin Entertainments rose 1.2 percent. The British operator of tourist attractions like Madame Tussauds waxworks and the London Eye reporter a rise in first-quarter revenue, helped by good weather in Europe and strong trade at its U.S. Legoland Parks.
The FTSE 100 finished 0.3 percent higher at 6,973.04 points after falling earlier in the session following weaker commodity stocks.
Commodities stocks recovered slightly. The UK mining index was down 0.8 percent and the oil and gas index slipped 0.6 percent.
Investors remained cautious and avoided strong bets, in line with European shares, which were recently hit by a bond-market sell-off. Britain has not been immune to jitters from the sell-off, but it has been supported by dovish statements from the Bank of England.
"U.S. and UK stocks appear to be preferred versus German stocks for now, mainly because any increases in interest rates in the U.S. and the UK aren't imminent and on hold for now," Peregrine & Black senior sales trader Markus Huber said. "Economic growth worries (are) hampering exporters."
Bank of England Governor Mark Carney said on Thursday it was possible British interest rates would be higher in a year's time, although the central bank would not raise them too soon and risk slowing the economy.
Several stocks went ex-dividend, including Sainsbury , down 2.3 percent, and drugmaker GlaxoSmithKline , down 1.4 percent. UBS analysts also downgraded Glaxo to "neutral" from "buy", saying company updates on cost structure had led them to cut earnings estimates. (Additional reporting by Lionel Laurent; Editing by Larry King)