* Miners firm as commodity prices rise
* Oils and defensives sold off
* U.S. futures looking positive
By David Brett
LONDON, Sept 3 (Reuters) - Britain's top share index was
flat in mid-session on Thursday with strength in miners,
bolstered by firmer metal prices, and banks offsetting falling
oil stocks and pharmaceuticals.
At 1054 GMT, the FTSE 100 <> was up 1.01 points at
4,818.56, after closing down 2.15 points at 4,817.55, on
Wednesday.
Global stock markets have retreated in the first few days of
September after sharp gains over previous months as doubts crept
back about the pace of recovery.
But Britain's blue-chip index is still up over 39 percent
since touching a six-year trough in March.
"In the short run, it's a self-fulfilling prophecy; everyone
was saying that the market would have a wobble in September,"
said Jim Wood Smith, head of research at Williams De Broe,
regarding the recent bull market.
"Those who missed the rally are trying to push it down so
they can get back in at a lower level. But the strength of the
data and corporate earnings means the dip will be short and
shallow."
Miners took their cue from China <>, which was boosted
by gains in commodity driven stocks.
Randgold <RRS.L>, Lonmin <LMI.L>, Vedanta <VED.L>, Kazakhmys
<KAZ.L> and Fresnillo <FRES.L> climbed 4.9 to 7.8 percent.
The market took some comfort from U.S. stock index futures,
which pointed to a higher open on Wall Street on Thursday,
following a four-day losing streak.
The S&P 500 <SPc1>, Dow Jones <DJc1> and Nasdaq 100 <NDc1>
futures were all up 0.4 percent.
Banks turned around earlier losses, with HSBC <HSBA.L>,
Royal Bank of Scotland <RBS.L>, Lloyds Banking Group <LLOY.L>
and Standard Chartered <STAN.L> up 0.4 to 4.2 percent.
Barclays <BARC.L> bucked the trend, down 0.6 percent.
Among individual risers, British Airways <BAY.L> added 1.2
percent ahead of its passenger figures which are due for release
later in the session.
OILS, DEFENSIVES DOWN
Oil majors fell as crude <CLc1> remained well below August
highs, despite rising to $69.
Heavyweights Royal Dutch Shell <RDSa.L> and BP <BP.L> lost 1
percent each.
Traders were also bearish on perceived defensive stocks,
highlighting the mixed market view.
AstraZeneca <AZN.L> was down 1.2 percent and GlaxoSmithKline
<GSK> shed 1.8 percent, while British American Tobacco <BATS.L>
and Imperial Tobacco <IMT.L> lost 1.5 and 1.2 percent
respectively.
Activity in Britain's services sector grew at its fastest
pace in nearly two years in August with the UK services PMI
rising to 54.1, above the 53.9 forecast in a Reuters poll.
However, while sterling jumped to session highs <GBP=>, the
FTSE showed little reaction.
The European Central Bank is to announce its decision
on interest rates and comment on the outlook for the economy.
The bank is expected to keep interest rates at 1.0 percent
and ECB President Jean-Claude Trichet is likely to preach
caution on the growing hype of a speedy euro zone economic
rebound from recession. []
Investors will look towards the United States later in the
session with initial jobless claim figures due at 1230 GMT, as
the number takes on more significance ahead of Friday's nonfarm
payroll data.
"Expect to see stagnant trading in late afternoon with
investors eyeing up the nonfarm payrolls in the US tomorrow,"
said Stephen Pope, chief global strategist at Cantor Fitzgerald.
