BP bid talk helps Britain's FTSE 100 recover early losses
* FTSE flat at 6.621.44
* BP boosted by Exxon Mobil bid talk
* Tate & Lyle knocked by CS downgrade
By David Brett
LONDON, Sept 20 (Reuters) - Britain's top shares were flat by midday on Friday as bid talk swirled around oil major BP, which helped lift an index flagging after the previous session's big rise.
BP, the UK's 6th largest company by market capitalisation, rose 1.6 percent, adding 5.1 points to the FTSE 100, with traders citing resurfaced talk that U.S. energy giant Exxon Mobil could be about to bid for the UK-listed firm.
Bid talk has consistently circled BP after a huge oil spill in the Gulf of Mexico in 2010 resulted in BP's share price being savaged. It still trades around 30 percent below its level prior to the spill.
The blue-chip FTSE 100 index was flat at 6,621.44 points by 1031 GMT, in light volume, having rallied 1 percent on Thursday after the U.S. Federal Reserve's move to delay cuts to economic stimulus.
"Equity markets failed to sustain yesterday's post FOMC party and now the hangover is setting in," Guy Foster, head of portfolio strategy at Brewin Dolphin, said.
Goldminers Randgold and Fresnillo were among the top fallers, each down around 2.7 percent, paring the previous session's gains after the stocks soared in tandem with gold, which is an inflation hedge in times of easy monetary stimulus.
Investors turned sour on Tate & Lyle slipping 2.7 percent, which traders attributed to a Credit Suisse note, in which the investment bank cuts its rating, target price and earnings estimates citing short-term hurdles facing the sweetener maker.
Credit Suisse cuts its recommendation on Tate & Lyle to "neutral" from "outperform", lowers its target price to 800 pence from 930 pence, and cuts its earning per share (EPS) estimates by up to 8 percent.
For the full-year, Tate is expected to post EPS of 60.10 pence, with revenues estimated to be around 3.5 billion pounds ($5.62 billion), according to Thomson Reuters forecasts. Tate trades on a forward 12-month price-to-earnings of 12.7 times, compared with peers on 18 times, according to Thomson Reuters data.
Traders were also looking to cash in their chips after this week's rally on global equity markets which was led by the Fed's decision to hold off on scaling back the wash of money it is pumping into global capital markets.
The programme has hit returns on bonds and driven investors over to the better returns on offer from stock markets, with the FTSE 100 up 12 percent since the start of 2013.
However, Psigma Investment Management's Tim Gregory said that the Fed would still eventually start to rein in its bond-buying programme as well as the underlying doubt over economic recovery that underpinned its decision.
"When the dust settles on the outcome of the Fed meeting, perhaps investors will not feel quite so exuberant about equity markets," said Gregory, who heads Psigma Investment Management's global equities team. (Reporting by David Brett)