* FTSE 100 down 4.28 points at 6,396.96
* Defensive stocks in favour
* Volatility near 6 month highs ahead of Fed
* Aggreko falls as UBS cuts after update
By David Brett
LONDON, June 19 Britain's top shares edged lower
by midday on Wednesday and investors were reluctant to make bets
before U.S. Federal Reserve Chairman Ben Bernanke provides
clarity on central bank policy later.
By 1031 GMT, the FTSE 100 was down 4.28 points, or
0.1 percent at 6,396.96.
London's blue-chip index has fallen near 7 percent since
mid-May, when investors began to worry that the Fed might scale
back its stimulus package, leaving the outlook for global growth
and corporate earnings in the balance.
While the expectation is that the U.S. continues with its
asset purchase programme at least until September, investors
traded cautiously ahead of Fed Chairman Ben Bernanke's news
conference due at 1800 GMT.
Defensive stocks, such as consumer staples and tobacco,
"Investors have been a little bit more jittery this morning,
which has been reflected by some volatile markets early in the
session," Craig Erlam, market analyst at Alpari said.
The FTSE volatility index - a gauge of investor
fear and usually rises as markets fall - is near 6-month highs.
"We think (volatility) will increase in the next few months
while the Fed tests the market about its exit strategy," said
Pascal Blanque, chief investment officer of Amundi.
"We're entering into a new regime for central banks, and
it's going to be a massive shift, so it's logical to see a rise
in volatility across all asset classes." he said.
Temporary power provider Aggreko topped the fallers
list, shedding 3.2 percent after UBS downgraded its rating to
"neutral" from "buy", and cut its earnings estimates following a
trading update on Tuesday.
Stocks trading without their dividends weighed on the FTSE
100 on Wednesday, with Experian, Land Securities
, Severn Trent and United Utilities
taking 1.8 points off the index.
Defence firm BAE Systems rose 1.8 percent after
media reports of potential Gulf orders worth up to 5 billion
pounds ($7.80 billion), and after the head of rival EADS
left open the possibility of a tie-up, according to
($1 = 0.6407 British pounds)
(Reporting by David Brett; Editing by Louise Heavens)