* FTSE 100 stable, outperforms key European indexes
* UK seen as less affected than other mkts by Ukraine crisis
* Some profit taking beginning, likely to continue - trader
* BHP rallies on spin-off plans
(Adds Russia convoy attack, updates prices)
By Francesco Canepa and Lionel Laurent
LONDON, Aug 15 Britain's top equity index ended
the day flat on Friday, erasing earlier gains after news broke
of a Ukrainian attack on a Russian convoy, although it held up
better than other European share markets.
Major European indexes had traded in positive territory for
most of Friday on expectations for continued ultra-loose
monetary policy after disappointing U.S. and euro zone data.
But news that Ukrainian artillery had destroyed a
"significant" part of a Russian armoured column that had crossed
into Ukraine overnight, according to Ukrainian President Petro
Poroshenko, rattled investors in late trade. The German DAX
index was hit particularly hard - down 1.7 percent.
The FTSE 100 closed flat at 6,689.08 points.
"The outperformance is a combination of the fact that (other
European markets) are fundamentally more exposed in terms of
trade to Russia and that technically they were performing better
earlier in the day, so they were quicker to unwind," said Jasper
Lawler, analyst at CMC Markets.
The FTSE ended the week up 1.8 percent, boosted by comments
from the Bank of England on Wednesday, which led investors to
push back expectations for an interest rate increase, and a
general rebound in global equity markets after two weeks of
Official data on Friday showed Britain had kept up its
strong growth in the second quarter, with its yearly pace of
expansion revised up to 3.2 percent, but the Bank of England has
said it is paying close attention to wage prospects and slashed
its forecasts for wage growth on Wednesday.
As a result, money market investors have push back
expectations for a UK interest rate rise until the first quarter
of next year at the earliest.
Traders had welcomed conciliatory comments from Russian
President Vladimir Putin on Thursday, but tensions between
Ukraine and Russia remained high, keeping investors cautious
about the market's near-term prospects.
"Short-term I'd probably be 'short' the FTSE because the
issues in the Ukraine could influence this market and I think
they are going to keep it on a knife's edge," Mark Priest,
senior trader at ETX Capital, said.
Another London-based trader said that some clients were
already taking profit on UK stocks after the past week's gains
and that he also expected a slight correction in the short term.
The FTSE is still down 2 percent since late July, dragged
down by tension in Ukraine and the Middle East, as well as
concerns about a tightening of U.S. monetary policy.
Helping support the FTSE on Friday was global miner BHP
Billiton, rising 1.2 percent after it declared its
preference for a spin-off of its unwanted aluminium, manganese
and nickel assets.
The spin-off would set the stage for the formation of a
separate company that one report said could be worth $14
(Editing by Alison Williams and Susan Fenton)