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FTSE 100 up 0.3 pct, mid-caps up 0.2 pct
* Burberry rises 3 pct on forecast-beating results
* Contract win pushes Micro Focus up 6.5 pct
* Crest Nicholson margin cut drives shares down 12.3 pct
* Paddy Power Betfair in talks to buy Fanduel in U.S. expansion
By Helen Reid
LONDON, May 16 (Reuters) - Strong results from leading software company Micro Focus, and a rally among mining stocks, drove Britain's FTSE 100 higher on Wednesday while Crest Nicholson and mid-cap pub companies suffered sharp losses.
The FTSE 100 was up 0.3 percent by 0833 GMT, at 7,744 points and flirting with the record high it reached in mid-January.
Micro Focus was by far the leader, jumping 8.4 percent to a two-month high after the software firm won a new $40 million licensing deal earlier than expected, saying it would bolster its first-half revenue.
The share price rose to its highest since mid-March when a major profit warning dented the stock.
"We see this as positive for sentiment, but only helping to reduce the extent to which H2 had to improve versus H1 to meet full-year guidance, rather than placing any upward pressure on numbers," said Investec analysts.
Mining stocks Anglo American, Glencore and Rio Tinto also pushed the index higher.
Burberry shares rose 3.7 percent after the luxury group beat market forecasts as it embarked
"While the bears would argue that Burberry's top line growth remains anemic in an otherwise very strong luxury market... Burberry's results are nevertheless a touch above market expectations," said Morgan Stanley analysts.
Overall the UK earnings season has driven sharp share price reactions, with a negative skew.
"Those companies that are disappointing relative to expectations are being treated pretty harshly by the market, and conversely those with very low expectations and particularly a big short position are being relatively rewarded for at least meeting expectations," said Guy Ellison, head of UK equities at Investec .
Several mid-cap stocks suffered sharp falls after results.
Homebuilder Crest Nicholson sank 12.5 percent to the bottom of the FTSE 250 after saying rising construction costs were hurting the pricing of its homes, forcing it to cut its full-year operating margin forecast.
Rising costs were also cited by pub firm Mitchells & Butlers as a reason for its profit dip, causing the shares to tumble seven percent.
Peer Marston's also fell 5.5 percent after reporting half-year results.
"Anything consumer-facing that's having to pay UK wages and UK rates is facing cost inflation," said Investec's Ellison.
Meanwhile M&A news continued to drive shares.
Paddy Power Betfair rose 5.5 percent after the bookmaker said it was in discussions to combine its U.S. business and fantasy sports company Fanduel, to target the prospective U.S. sports betting market after a Supreme Court ruling on Monday paved the way for states to legalise sports gambling.
Among small-caps, shares in formalwear retailer Moss Brothers jumped 8.4 percent after the firm said its sales decline had slowed.
Overall earnings from UK companies have been encouraging this quarter, while macroeconomic data has been poor.
"It seems the first quarter for UK companies was better than for the UK economy," said Caroline Simmons, deputy head of the UK chief investment office at UBS Wealth Management. "We expect a modest upside over the next six months but we don't expect it to outperform other markets."
Analysts are downgrading their earnings expectations for the UK, however, as the results season draws to a close.
(Reporting by Helen Reid, Editing by William Maclean)