* FTSE 100 up 0.3 pct, but still below 6,900 level
* Miners rebound after rise in Chinese factory activity
* Property sector shrugs off disappointing mortgage data
* AstraZeneca advances after positive data on products
* Standard Life drops on reported UK pensions shake-up
(Updates prices, adds quotes, broker comment)
By Sudip Kar-Gupta and Lionel Laurent
LONDON, June 2 Britain's top equity index inched
higher on Monday as a strong Chinese factory report lifted
mining stocks and as homebuilders shrugged off
worse-than-expected mortgage approval data.
The blue-chip FTSE 100 index was up by 0.3 percent, or 18.77
points, at 6,863.36 points at 1040 GMT.
Mining stocks across Europe, including London-listed Rio
Tinto and BHP Billiton, rose after data showed
that Chinese factory activity expanded at its fastest pace in
five months in May.
Mining stocks are particularly sensitive to the state of
China's economy, since it is the world's biggest metals
consumer. The sector fell on Friday on concerns about a possible
economic slowdown there.
"Given that the (mining) sector has been pretty unloved
recently, relating to ongoing concerns regarding Chinese growth,
any bit of positive news on China will help," said Robert
Parkes, equity strategist at HSBC.
The FTSE 350 Mining Index - which fell 16
percent in 2013 - was up 1.3 percent.
Homebuilder Barratt Developments also outperformed,
rising 2.4 percent, after Goldman Sachs upgraded the stock to
"buy" from "neutral".
Other property stocks like Wolseley and Hammerson
also rose despite the news that British mortgage
approvals fell more than expected in April to their lowest level
in nine months.
Although the data pointed to signs that new rules on bank
lending have taken some of the heat out of the housing market,
analysts said this was also balanced by the expectation that
policymakers would not rush to restrict money supply, as well as
a robust UK PMI indicator for May.
British manufacturing activity kept expanding at a rapid
pace in May, a survey showed on Monday, suggesting the economic
recovery has lost little of its shine this quarter.
"We've had a fairly robust PMI indicator out of the UK this
morning," said HSBC's Parkes. "That will help domestically
Pharmaceuticals group AstraZeneca, whose shares have lost
ground over the last month after U.S. rival Pfizer
walked away from its bid, saw its shares rise 1.3 percent after
the company got positive data for two of its products.
On the downside, shares of insurer Standard Life fell
2.5 percent after press reports said a move to a collective
pensions system would be formally put on the UK legislative
agenda later this week.
"The thinking is that the government will introduce
collective pensions, as they have in the Netherlands, whereby
pensions money is pooled and this brings charges down," said
Edward Houghton, analyst at Sanford C. Bernstein. "Ultimately,
people are thinking margins are coming down on pensions."
The FTSE 100 has risen by nearly 2 percent since the start
of 2014, and hit a peak of 6,894.88 points last month, which
marked the index's highest level since December 1999.
However, some traders said the FTSE remained prone to
short-term pull-backs if it continued to fail to break above the
6,900 point level in order to challenge a record 7,000 point
"I'm still concerned that the FTSE has not broken out above
the previous highs yet," said Hantec Markets analyst Richard
(Editing by Louise Heavens and Toby Chopra)