* FTSE 100 up 0.2 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
By Sudip Kar-Gupta and Lionel Laurent
LONDON, June 2 Britain's top equity index inched
higher on Monday as strong Chinese factory data lifted mining
stocks and as homebuilders shrugged off worse-than-expected
mortgage approval data.
The blue-chip FTSE 100 index was up by 0.2 percent, or 14.86
points, at 6,859.37 points by 1420 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 the
economy in 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," HSBC equity
strategist Robert Parkes said.
The FTSE 350 Mining Index - which fell 16
percent in 2013 - was up 1.4 percent.
Homebuilder Barratt Developments also outperformed,
rising 1.7 percent, after Goldman Sachs upgraded the stock to
"buy" from "neutral".
Other property stocks such as Persimmon 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 balanced by the expectation that
policymakers would not rush to restrict money supply, as well as
by 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
Beverage-bottling stocks Coca-Cola HBC and Rexam
were up 3.3 percent and 2 percent respectively, with
traders saying investors were coming back to the former after a
20-percent drop in its share price year-to-date and to the
latter after a 450 million-pound cash return.
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 1.7 percent after
the company got positive data for two of its products.
On the downside, shares of insurer Standard Life fell
1.5 percent after media reports said a move to a collective
pensions system would be formally put on Britain's 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," Sanford
C. Bernstein analyst Edward Houghton said. "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 6,894.88 points last month, its 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," Hantec Markets analyst Richard Perry
(Editing by Louise Ireland)