Wolseley falls and FTSE 100 stagnates as US stalemate goes on
* FTSE 100 up 5.64 points at 6,454.68
* Wolseley falls as U.S. shutdown continues
* Tate & Lyle climbs after results
By David Brett
LONDON, Oct 4 (Reuters) - Wolseley led the fallers as Britain's top shares continued to limp along in the face of a U.S. government shutdown which threatens to curb earnings of companies such as the building supplies firm exposed to the country.
Wolseley, which has nearly half of its revenues exposed to the United States, fell 1.2 percent and is down nearly 8 percent since mid-September when investors' focus began to fall on U.S. debt worries.
"Obviously the confidence effect will feed through to the market and you will see a lot more wobbles if this turns into a drawn out affair," Peter Dixon, economist at Commerzbank, said.
The Congressional stalemate over the U.S. budget continued on Friday and showed little sign of progress toward a solution with an Oct. 17 deadline to raise the U.S. debt ceiling before the treasury runs out of funds.
"If we get to the stage where the U.S. has to start thinking about rescheduling payments on it debt, that would be a serious change in the way market think about the shutdown," Commerzbank's Dixon said.
While markets on the whole largely remain calm over the issue, volatility - a crude gauge of investor fear - has risen 19 percent since mid-September.
The FTSE 100 was up 5.64 points at 6,454.68 by 1029 GMT at 6,449.04 but the index has back-tracked since hitting 13-year highs in May and is around 6 percent off that level.
Among the top gainers was sweetener maker Tate & Lyle , which rose 1.7 percent after its first-half results. Analysts say a lot of bad news is already in Tate's share price after a 3 percent fall since the start of the year.
"Patience (is) required," Investec analyst Martin Deboo said in a note, repeating his "buy" rating on Tate. "The long term story remains compelling and plenty of bad news is in the price."
Standard Life was the top riser, gaining 2.5 percent as JP Morgan reiterated its "overweight" recommendation on the life insurer saying growth remains strong, the dividend is well covered and forecasting a special dividend of 0.3 billion pounds in 2013.
Standard Life's dividend yield is currently 4.34 percent, well above returns investors can get on safer government bonds such as Germany, the UK and U.S., which have been suppressed by continued global easy economic policy.
Bond yields, however, have been rising in the wake of the shutdown in the U.S. and that fear could eventually feed through to the stock market.
"If no agreement has been reached by this time next week the likelihood is that the FTSE will be quite a bit lower," Charles Stanley technical analyst Bill McNamara said.
His initial target is around 6,386, a low hit earlier in the week. (Reporting by David Brett; Editing by Christina Fincher)