June 12, 2013 / 11:22 AM / 4 years ago

Britain's FTSE steady, but Severn Trent sinks

* FTSE 100 index up 0.2 percent in choppy trade

* Severn Trent drops 8.3 percent as bidder walks away

* Charts point to more gains above 6,250

By Toni Vorobyova

LONDON, June 12 (Reuters) - Britain's top share index steadied just above seven-week lows on Wednesday, with investors seeing value in some stocks after recent losses but with any gains capped by negative merger and acquisitions newsflow.

Severn Trent was by far the worst performer, down 8.3 percent after a Canadian-led consortium walked away from its bid for the water utility.

On the flip side, Aberdeen Asset Management, which had tracked the steep losses of the broader market in recent days on concerns that its clients could pull out of equities, rallied 3.6 percent as global stocks recovered some poise.

Other recent laggards, such as insurers and banks, also held up well, as investors bought the dip in the absence of any fresh steer on how long equity markets can still count on support from global central bank stimulus.

"A lot of people are looking for a bit of a bounce here after the recent falls. The shake out was necessary, but I think they are looking for it to go a bit further," said Trevor Coote, head of equity sales at Alexander David Securities.

"We are seeing more push into cyclicals, looking at growth stories such as Babcock, and also some defensives such as BAT "

The FTSE 100 was up 13.46 points, or 0.2 percent, at 6,353.54 points by 1110 GMT, recovering some poise after dropping some 8.6 percent in the previous 14 sessions to hit a seven-week intra-day low of 6280.08 points on Tuesday.

Despite the relatively steep sell off from May's 13-year peaks, technical charts left the door open for further gains.

"The last major swing point low for the index was in April, around the 6,250 level ... so as long as that's intact I am pretty happy that the medium uptrend remains," said Dominic Hawker, technical analyst at Messels.

The FTSE 100, however, lagged its European peers on Wednesday, weighed down in part by heavyweight Vodafone trading without entitlement to its latest dividend.

The heavyweight telecoms group fell 8.7 pence, or 4.5 percent, with the dividend accounting for 6.9 pence of the move and the rest made up by the market reaction to its preliminary takeover bid for Kabel Deutschland.

"The deal has strategic merits but it will be hard for Vodafone to pay a significant premium above the current price, which will be required to close the deal and still stick to its merger criteria," analyst at Lieberum Capital said in a note. "We would recommend traders switching to BT near term." (Editing by Jeremy Gaunt.)

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