* Energy stocks gain, shrug off oil price slide
* Miners weaker, tracking weaker metals
* Banks weaker but insurers up on Friends Prov M&A talk
By David Brett
LONDON, July 13 (Reuters) - London's leading share index in
mid-session on Modnay was flat in light volume as gains in
defensives and energy stocks, which shrugged off weaker oil
prices, were offset by falls in banks and miners.
By 1007 GMT, the FTSE 100 <> was 1.77 points lower at
4,125.40 after it lost 31.49 points to close at 4,127.17 on
Friday, its lowest close since April 28.
The blue-chip index has fallen 6.7 percent this year but is
up 19.3 percent since touching a six-year low in March.
BP <BP.L>, Royal Dutch Shell <RDSa.L> and Tullow Oil <TLW.L>
all gained between 0.6 percent and 1 percent, but BG Group
<BG.L> was already showing signs of softening, down 0.1 percent.
"Oil majors are rising after taking a bit of a hammering
recently as oil came back to $60 per barrel. It's a short term
bounce. If oil pushes lower again, then expect the big names to
continue to fall," says Jimmy Yates, Head of Equities at CMC
Markets.
The price of crude languished at a seven-week low <CLc1>
below $60 per barrel.
Insurers got a boost on a bout of takeover activity after
Resolution <RS.L> said the board of Friends Provident <FP.L> had
rebuffed its merger proposal. []
Friends Provident <FP.L> gained 6.7 percent, topping the
blue-chip leaderboard, followed by Aviva <AV.L>, which added 2.5
percent, while Standard Life, <SL.L> and Old Mutual <OML.L>
gained 1.3 and 1.5 percent, respectively.
Defensive tobacco stocks and pharmaceuticals were in
slightly positive territory as investors looked to company
assets, which they consider to be resilient to economic turmoil.
GlaxoSmithKline <GSK.L> added 1.2 percent, Shire <SHP.L>
rose 0.3 percent and British American Tobacco <BATS.L> added 0.7
percent.
Heavyweight mobile operator Vodafone <VOD.L>, added support,
gaining 0.9 percent.
MINERS, BANKS RETREAT
Miners were on the back foot as metal prices continued to
soften as confidence on the demand outlook for raw materials
crumbled.
Fresnillo <FRES.L>, Lonmin <LMI.L>, Rio Tinto <RIO.L>,
Kazakhmys <KAZ.L> and Vedanta fell between 2.7 and 6.5 percent.
Xstrata <XTA.L> dropped 5.7 percent, after it said on Sunday
that it remained committed to a nil-premium merger with Anglo
American <AAL.L>, down 2.3 percent, after the Observer newspaper
said Xstrata would offer a 5 billion pounds ($8.05 billion)
sweetener to seal the deal. []
Banks, whose performance is closely correlated to risk
appetite, fell.
Barclays <BARC.L>, HSBC <HSBA.L>, Standard Chartered
<STAN.L> and Lloyds Banking Group <LLOY.L> lost between 0.6 and
2.4 percent.
Britain needs patience in selling stakes of RBS and Lloyds
Banking Group, said UK Financial Investments, the body managing
the holdings. []
"We have been stuck in a relatively tight range as there's a
sense that the recovery might not be as soon or as strong as had
been hoped," said Richard Hunter, head of equities at Hargreaves
Lansdown.
Britain's largest gas retailer, Centrica <CNA.L> shed 1.5
percent after it suffered a setback in its battle to take over
Venture Production, <VPC.L> with the North Sea gas producer's
two largest investors backing management's rejection of
Centrica's $2 billion bid. []
Associated British Foods was one of the bigger fallers, down
2.2 percent after RBS cut it to "sell" from "hold".
($1=.6211 pounds)
(Reporting by David Brett; editing by Karen Foster)
