Britain's FTSE steadies after 3-week high, miners fall

Fri Jul 4, 2014 4:36am EDT

* FTSE 100 index steadies near 3-week high

* Volumes low as U.S. market shut for holiday

* Miners under pressure as metals prices fall

By Atul Prakash

LONDON, July 4 (Reuters) - Britain's top share index steadied after setting a three-week high on Friday, although mining stocks retreated following a decline in metals prices after recent strong gains.

However, the blue-chip FTSE 100 index headed for its best weekly gains since early May as strong U.S. economic data raised expectations that the world's biggest economy was on a recovery path.

The FTSE 100 index was flat at 6,862.56 points by 0815 GMT after climbing as high as 6,866.91 points earlier in the day. It was up 1.6 percent this week, the best weekly gain in almost nine weeks.

But the British mining index fell 0.2 percent after copper prices dropped 0.3 percent and nickel slipped 1 percent. Miner Rio Tinto and BHP Billiton were down 0.5 percent and 0.4 percent respectively.

"After having a good run, miners are under some pressure due to weaker metals and as some investors are taking profits," David Battersby, investment manager at Redmayne-Bentley, said.

"The market is showing a lack of direction as the U.S. market is closed and there are some discouraging reports related to Sports Direct."

Sports Direct fell 1.3 percent after a report in Britain's Guardian newspaper said leading investors in the company will vote against the re-election of the chairman and other board members at September's annual general meeting in protest at the multi-million pound bonus scheme its founder Mike Ashley. Sports Direct declined to comment to the paper.

Investors avoided strong bets on the last trading day of the week and as the U.S. market was closed for a holiday. Trading volumes were low, with the FTSE 100 witnessing about 7 percent of its 90-day daily average volume in the first hour of trading.

"Trading activity is expected to be rather subdued today with very little data out in Europe and U.S. markets closed for Independence Day," Markus Huber, senior analyst at Peregrine & Black, said in a note.

"While sentiment remains positive, it wouldn't come as too much of a surprise if a little bit of profit-taking. Stocks had a good week so far and taking a bit of money off the table might not be a bad idea."

On the positive side, budget airliner easyJet rose 2.8 percent, the best gainer in the FTSE 100 index, after reporting a 10 percent jump in its passenger numbers in June from the same month of the previous year. (Reporting by Atul Prakash; Editing by Alison Williams)