FTSE flat, oils, miners gain, banks weak

* Oils rally as crude rises; BP upgraded by Goldman

* Miners rise as metal prices recover

* Heavyweight financials drag

* Triple-witching futures and options expiries eyed

By Jon Hopkins

LONDON, Dec 18 (Reuters) - Britain's top shares were flat early on Friday morning, steadying after the previous session's sharp falls, with gains by energy companies and miners countering weakness in banks.

At 0858 GMT, the FTSE 100 index .FTSE was 2.63 points firmer at 5,220.24, after closing 102.65 points, or 1.9 percent, lower on Thursday.

Investors were wary ahead of a 'triple witching' in the market on Friday, when contracts for stock index futures, index options and equity options expire at the same time.

"Everyone is happy to sit on their hands ahead of the expiries, with few reasons to get involved in the market anyway after yesterday's sell-off," said Mic Mills, senior trader at ETX Capital.

Oils provided the main support for blue chips with the sector rallying in tandem with a firmer crude price CLc1 and helped by an upbeat sector review from Goldman Sachs.

BP (BP.L) was a top FTSE 100 riser, up 1.3 percent as Goldman hiked its rating for the oil major to 'buy' from 'neutral'. BG Group (BG.L) and Royal Dutch Shell (RDSa.L) added 1.0 and 0.7 percent respectively, with the broker raising target prices for the two.

Heavyweight miners also found support as metal prices recovered following Thursday's falls as recent dollar strength faded. Vedanta Resources (VED.L), Lonmin (LMI.L), Xstrata (XTA.L), Antofagasta (ANTO.L) and Rio Tinto (RIO.L) took on 1.0-1.2 percent.

Mobile telecoms heavyweight Vodafone (VOD.L) also lent the market strength, up 0.8 percent after Nomura hiked its target price for the company in a review of European telcos.

The same broker also issued an upbeat review of European utilities, raising target prices across the sector, which helped lift Scottish & Southern Energy (SSE.L), Severn Trent (SVT.L) and United Utilities (UU.L) 0.8-1.1 percent higher.

Utilities were also wanted for their defensive characteristics, as were drugmakers, food retailers and tobacco firms, with GlaxoSmithKline (GSK.L), Tesco (TSCO.L), and Imperial Tobacco (IMT.L) up 0.3-1.1 percent.

Healthcare products group Smith & Nephew (SN.L) was the top FTSE 100 riser, up 1.2 percent as UBS boosted its target price.

BANKS DRAG

Banking issues were the main drag on blue chips as the sector extended Thursday's falls on the back of concerns over tough new Basel capital regulations.

Lloyds Banking Group (LLOY.L) was the top FTSE 100 faller, down 2.2 percent. Disposals that Lloyds agreed to as compensation for taking state aid were a "very fair deal" but it has no plans to sell the assets soon, its chief executive told the Financial Times. [ID:nLDE5BH008]

Standard Chartered (STAN.L), Barclays (BARC.L), Royal Bank of Scotland (RBS.L) and HSBC (HSBA.L) lost 0.3-1.7 percent

Life insurers also fell after a recent rally, led by Prudential (PRU.L), down 1.7 percent, while Old Mutual (OML.L), Aviva (AV.L) and Standard Life (SL.L) shed 0.6-1.4 percent.

The Bank of England, however, said Britain's financial sector looked in better shape than it did six months ago, and it has urged banks to take advantage of current funding conditions to shore up balance sheets.

In its twice-yearly Financial Stability Report, the BoE said banks had benefited from a remarkable rise in asset prices over the past nine months and were finding it easier to raise capital. [ID:nLAG003860]

But British consumer confidence fell in December for a second consecutive month, the first time since July 2008 that confidence fell two months in a row, a survey by GfK NOP for the European Commission showed on Friday. [ID:nLDE5BG2F7]

Investors will keep an eye on British public sector finances data for November, scheduled for release at 0930 GMT. (Editing by Dan Lalor)