* Blue-chip FTSE 100 index up 0.3 percent
* CRH gains on deal to buy assets from rivals
* Budget airlines fall after Ryanair update
By Atul Prakash
LONDON, Feb 2 (Reuters) - Britain’s top share index edged up in morning trading on Monday, with Irish building supplies groups CRH leading the market higher after agreeing to buy assets from rivals.
Shares in CRH rose 6 percent, the top gainer in the blue-chip FTSE 100 index, after the company said it had agreed to pay 6.5 billion euros ($7.4 billion) for assets that Lafarge and Holcim needed to sell to secure regulatory approval for their planned merger.
“The metrics highlighted by management look attractive. Earnings are expected to grow by 25 percent in the first full year of ownership, with the deal leaving CRH in the global top three building materials companies,” said Keith Bowman, equity analyst at Hargreaves Lansdown.
CRH, the leading producer of asphalt for road building in the United States, said the deal would expand its global reach and also make it the largest building supplier in central and eastern Europe.
“CRH has a history of acquisition and successfully integrating businesses into its operations. This deal will be large, adding 26 percent to our expected sales figure for 2014,” Cantor Fitzgerald analyst Ian Osburn said.
The benchmark FTSE 100 index was up 0.3 percent at 6,770.56 points by 0928 GMT after closing 0.9 percent lower on Friday.
It was also helped by a rally in UK energy stocks , up 1.7 percent, following an 8 percent jump in oil prices on Friday on a record weekly drop in U.S. oil drilling. However, gains were trimmed by a drop in oil prices on Monday.
“Crude oil prices are still much higher than their levels at the time of stock market closing in London on Friday and that’s providing some support to energy stocks,” said John Smith, senior fund manager at Brown Shipley.
“However, the problems in the oil sector will stay for quite some time and we don’t see a stabilisation in oil prices anytime soon. The rally that we are seeing in oil stocks today is an opportunity to reduce some exposure to the sector.”
On the downside, budget airlines came under pressure after Ryanair, Europe’s largest airline by passenger numbers, cautioned that profit growth will be modest next year as low oil prices help rivals to step up competition.
Ryanair fell 3.7 percent despite again raising its profit forecast, with the company saying it would benefit only slightly from lower jet fuel costs this year as it has hedged 90 percent of its fuel needs at $92 per barrel up to March 2016.
Another budget airline easyJet fell 4 percent. (Reporting by Atul Prakash; Editing by Crispian Balmer)