* FTSE 100 index up 0.05 percent
* Miners remain supported by China PMI data
* Wolseley weak on cautious outlook
By Jon Hopkins
LONDON, Dec 4 Britain's top shares held steady
on Tuesday as gains in heavyweight miners helped offset caution
over progress on discussions over the U.S. "fiscal cliff".
The mining sector modestly extended Monday's
advance as copper held firm after upbeat manufacturing
data from top metals consumer China at the weekend.
The China data outweighed concerns over the fiscal cliff, a
combination of U.S. spending cuts and tax rises due to be
implemented in early 2013 that could tip the world's leading
economy back into recession.
"The miners are backstopping us again but the focus still
remains on the fiscal cliff negotiations in the U.S. and until
these can be resolved any hoped-for Santa Rally is unlikely to
gain much traction," Andrew Crook of Sucden Financial Private
The White House has dismissed a budget deal proposal from
congressional Republicans that included tax reforms and spending
cuts, saying it did not meet President Barack Obama's pledge to
raise taxes on the wealthiest Americans.
At 0907 GMT, the FTSE 100 index was up 2.85 points,
or 0.1 percent at 5,874.09, stuck in a very tight trading range
from 5,850 to 5,875.
The UK blue chip index closed 0.1 percent higher on Tuesday,
having run back from an early session peak just above the
psychologically important 5,900 level late in the session.
"Monday's rally to 5,902.00 fell short of the previous high
and the 5,871.24 close has placed the index in position to break
further,"James A. Hyerczyk, analyst at Autochartist said.
"If downside momentum increases on Tuesday, traders should
watch for the start of a possible break into 5,755.00 to
Plumbing and building supplies group Wolseley was a
top blue chip faller, shedding 1.1 percent as a slightly
cautious outlook and weak showings in continental Europe weighed
against continued strong growth in North America in the first
"The Wolseley Q1 IMS looks broadly in line with consensus
but with scope for some small (2-3 percent) FY estimate slippage
given the outlook," Oriel securities said in a note reiterating
its "hold" rating on the stock.
Wolseley was the top traded stock in the FTSE 100, with
volume at almost 40 percent of its 90-day daily average in the
first hour of trading, with total index volume at 8 percent.
British retail sales edged up in November, though by less
than analysts were expecting, as shoppers hunted for cheap
Christmas gifts, the British Retail Consortium said on Tuesday.
Like-for-like retail sales rose by 0.4 percent in value
terms on the year, after falling 0.1 percent in October, the BRC
said. Economists polled by Reuters had expected a 0.9 percent
Meanwhile, Britain's economic growth in the next two years
will be weaker than previously thought, held back by a global
slowdown and domestic austerity measures, the British Chambers
of Commerce said on Tuesday.
Food retailers were a weak sector, reflecting the dull BRC
survey and some cautious broker comment, with Espirito Santo
Investment Bank downgrading its ratings for both Tesco
and WM.Morrison to "sell" from "neutral".
Espirito Santo maintained its "neutral" stance on
J.Sainsbury pointing out that its latest survey of 2,500 UK
consumers showed Sainsbury's positive sales momentum looking set
to continue and accelerate, whilst customers' perceptions of
Tesco and Morrison have deteriorated.
(Reporting by Jon Hopkins/editing by Chris Pizzey, London MPG
Desk, +44 (0)207 542-4441)