LONDON (Reuters) - Britain's top share index rose to a two-month high on Tuesday, helped by gains in Carnival (>> Carnival plc) and strength in the bank sector after Lloyds (>> Lloyds Banking Group PLC) rose after a deal to buy a credit card business.

The blue chip FTSE 100 index <.FTSE> was up 0.4 percent at 7,043.96 points by the close, slightly underperforming euro zone blue chips <.STOXX50E>.

It hit its highest level since October 25, with blue chips supported by a drop in sterling to a 1-month low.

Banking stock Lloyds (>> Lloyds Banking Group PLC) was among the top gainers, up 2.2 percent following its deal to buy the MBNA credit card business from Bank of America (>> Bank of America Corp) for 1.9 billion pounds ($2.4 billion) in an effort to increase profit and reduce its reliance on mortgage lending.

"The anticipated financial performance and shareholder value creation that is expected to be generated by this transaction is impressive, in our view, and suggests a better use of capital than simply returning it to shareholders," Gary Greenwood, analyst at Shore Capital, said in a note.

Fellow bank Barclays (>> Barclays PLC) rose 2.5 percent, with Royal Bank of Scotland (>> Royal Bank of Scotland Group plc) up 1.4 percent.

Top individual riser was Carnival (>> Carnival plc), which ended up 3 percent after reporting results in the middle of the session.

The world's largest cruise operator reported higher-than-expected quarterly revenue and profit, helped by an increase in ticket prices and onboard spending.

Precious metals miners were on the back-foot, with Fresnillo (>> Fresnillo Plc) and Randgold Resources (>> Randgold Resources Limited) down 2.1 percent and 1.2 percent as the price of gold eased. [GOL/]

The likes of Antofagasta (>> Antofagasta plc) and Glencore (>> Glencore PLC) turned higher after early falls, though some thought a recent rally was running out of steam.

"Towards the year-end ... some fund managers (are) looking to book profits on stocks that have performed very well. If we take a look at some of the more diversified miners, they've seen aggressive moves this year," Dafydd Davies, partner at Charles Hanover Investments, said.

British miners are up nearly 95 percent this year, led by mid cap Hochschild (>> Hochschild Mining Plc), which has surged nearly 300 percent, and Anglo American (>> Anglo American plc), which has gained more than 270 percent.

Outside of the blue chips, Paysafe (>> Paysafe Group Plc) jumped over 5 percent after announcing a buyback of up to 100 million pounds sterling.

(Editing by Angus MacSwan)

By Kit Rees and Alistair Smout