* Blue-chip FTSE 100 index flat by midday trading
* Miners under pressure on China growth concerns
* RSA up on expectations of averting more writedowns
By Atul Prakash
LONDON, Jan 6 Britain's top share index was
steady by midday on Monday, with weaker mining and retail
equities cancelling out sharp gains in RSA Insurance on
expectations it would avoid further writedowns.
RSA rose 6.7 percent after the Sunday Telegraph newspaper
said a probe into its Irish business was expected to conclude
that accounting problems were an isolated incident, and that no
further writedowns would be needed.
Results from the investigation by PWC are due on Jan. 9.
The stock, the top gainer on the FTSE 100 index,
also got a fillip from a UBS note raising its price target and
adding it to the bank's most preferred list, traders said.
Gains in RSA helped the wider market to stay steady at the
start of the first full trading week of 2014, with the blue-chip
FTSE 100 flat at 6,731.75 points by 1132 GMT, despite a decline
in miners and retailers.
The UK mining index fell 0.9 percent on new
signs of economic weakness in China, a top metals consumer.
Surveys showed growth in Chinese service sector activity slowing
in December, mirroring the trend seen in manufacturing.
"China is slowing down, particularly on the construction and
manufacturing side, and that could have a negative impact on the
commodity space as China is a huge driver of commodities
demand," Macquarie strategist Daniel McCormack said.
"If we do see a major slowdown in the country, then it would
be difficult for the mining sector to do well. But that's not my
base case as a major slowdown in China is quite unlikely. In the
near-term, I would like to be positioned in industrials and
techs and be cautious on miners."
Miner Fresnillo fell 2.3 percent to feature at the
bottom of the FTSE 100 index, Randgold Resources
declined 2.2 percent, while heavyweight Rio Tinto
dropped 1.7 percent.
Retailers also weighed on the FTSE 100, which gained more
than 14 percent in 2013, with Marks & Spencer down 1.8
percent to 435.90 pence on concerns that a trading update later
this week may reveal weak Christmas sales.
"With the technical outlook deteriorating rapidly and with
heavy negative media sentiment, I wouldn't be surprised to see
further moves lower: 416 pence, which is the cycle low from June
last year should act as support," said Jordan Hiscott, sales
trader at Gekko Global Markets.
The market showed little reaction after the release of a
survey showing an unexpected slowdown in the country's services
sector growth last month. However, confidence rose and the
economy was likely to have recorded its strongest expansion
since 2007 last year.
"The outcome is softer than expected but the average of Q4
2013 data remains a touch higher than in Q3, a sign that the
services sector has remained solid over the quarter," Newedge
Strategy said in a note.