Britain's benchmark share index rose for a third consecutive day on Monday, helped by hopes of an election victory for Greek parties committed to keeping the country in the euro zone, although traders cautioned any rally could be short-lived.

The blue-chip FTSE 100 index <.FTSE> was up 48.50 points, or 0.9 percent, at 5,400.03 points. It earlier reached an intraday peak of 5,411.64 points - the index's highest intraday point since May 17.

However, Brown Shipley fund manager John Smith said he did not see the index making much progress beyond the 5,500 point level due to fears over the euro zone crisis and a slowdown in the world economy.

"I don't think the FTSE can sustain levels of over 5,500. There's still too much uncertainty, not only with Europe but also with signs of a slowdown in China," said Smith, whose firm manages around 2 billion pounds worth of assets.

Mining stocks, which have fallen sharply in recent weeks due to fears that a global economic slowdown will impact demand for metals, led the FTSE's leaderboard, with Polymetal International up 3.4 percent and Rio Tinto up 2.7 percent.

The FTSE 350 mining sector <.FTNMX1770> has fallen nearly 10 percent so far this year, and traders said bargain-hunters had picked out the sector's badly-beaten stocks to add some risk back into their portfolio due to signs of hope over Greece.

"Anything that allays fears over Greece is a positive. People are just looking for a bit of respite, with the value-players getting back into equities," said Bastion Capital's head of equities Adrian Slack.

UBS UPGRADE BOOSTS CAPITA

Opinion polls at the weekend showed Greek conservative parties regaining the lead before the June 17 parliamentary election, which would allow the formation of a pro-bailout government committed to keeping Greece in the euro zone.

The improvement in sentiment over Greece also helped boost heavyweight UK banking shares, pushing the FTSE 350 bank sector <.FTNMX8350> up by 0.8 percent.

Outsourcing group Capita also rose sharply, advancing by around 2.6 percent after investment bank UBS upgraded its rating on the stock to "buy" from "neutral".

However, trading volumes were thin, with many markets in Europe and the United States closed for a public holiday.

Trading volumes for the FTSE 100 were at just 5 percent of the average 90-day volume, and JN Financial senior trader Adrian Redmond said people were looking to sell stocks on the back of the FTSE's brief rally.

"We've already started to see people selling the index at this level," he said.

(Reporting by Sudip Kar-Gupta; Editing by Janet Lawrence)