* FTSE 100 down 0.2 pct
* Smith & Nephew jumps on report of Medtronic bid interest
* Miners fall after weak China data
By Tricia Wright
LONDON, June 5 Britain's top shares drifted
further away from multi-year highs on Thursday, with investors
reluctant to place bets before a European Central Bank meeting,
which is expected to yield fresh monetary easing.
Medical technology company Smith & Nephew bucked the
slightly weaker market, rising 4.2 percent in brisk trade on
reports that U.S. medical device maker Medtronic is
looking at a takeover of London-based Smith & Nephew. Smith &
Nephew declined to comment.
"Smith & Nephew's always had a lot of bid speculation around
it; it's a swirling long-term story. I don't know whether this
is going to happen; it seems to be a lot like the famous
Pfizer/AstraZeneca (bid story) - the deal probably makes sense
but there's an added tax benefit to Medtronic if they manage to
do it," Joe Rundle, head of trading at ETX Capital, said.
"I think (Smith & Nephew) probably will go higher from here;
there probably will be a firm bid of some kind, but I'm not sure
it will actually complete."
Trading volume in Smith & Nephew was 1-1/2 times its 90-day
daily average after only an hour's trade. Turnover on the
broader FTSE 100 was just 7 percent of its average.
The index was down 16.48 points, or 0.2 percent, at 6,802.15
points by 0756 GMT, trading just over 1 percent shy of a peak
hit last month of 6,894.88 - its highest level since December
1999, when it set a record peak of 6,950.60 points.
The ECB, at its meeting on Thursday, is expected to cut its
main interest rate and impose negative interest rates on
overnight deposits, aiming to prompt banks to lend instead and
to prevent the euro zone from slipping into Japan-like
deflation. It is also expected to launch a long-term refinancing
operation targeted at businesses.
But with these measures seen as already priced into equity
markets, any disappointment could result in a pullback.
"I'm slightly nervous actually," said Peel Hunt equity
strategist Ian Williams.
"People are expecting a rate cut plus a lending measure plus
some kind of comments about QE (quantitative easing), or
whatever the next step may be if inflation continues to
undershoot. If we don't get that ... potentially we are a bit
Miners proved a drag on the FTSE 100, dropping
0.7 percent after data showed growth in top metals consumer
China's services sector retreated to a four-month low in May.
(Additional reporting by Paul Sandle; Editing by Susan Fenton)