* FTSE 100 flat at 6,582.86
* Index pauses after failure to break 6,600 resistance
* City Index sees FTSE rising to 6,700
By Francesco Canepa
LONDON, Sept 11 Britain's top share index was
flat on Wednesday, pausing after a recent rally, as profit
takers hit DIY-retailer Kingfisher in response to a
cautious update and a JP Morgan downgrade dragged on
emerging-market-focused bank HSBC.
The FTSE was down 1.13 points, unchanged in percentage
terms, at 6,582.86 points by 1051 GMT. Technical traders were
cashing in on a 3 percent rise on the FTSE over the last 10
sessions after the index failed to break a technical resistance
at 6,600, a level that has capped it since mid-August.
"There is a little bit of profit taking," said Giles Watts,
head of equities at City Index.
Watts cited the prospect of a likely reduction in U.S.
monetary stimulus - which has helped the FTSE rise 17 percent in
the past year - as the main factor sapping investor appetite.
But he remained confident the index would continue to rise into
the year-end as the global economy improved.
"We are going to see a little bit of volatility but there is
still a feeling that this is going to grind its way up to
6,700," he said.
Emerging-market focused bank HSBC knocked 5 points off the
FTSE after JP Morgan downgraded its recommendation on the stock
to "hold" from "buy", preferring domestic British banks
in light of improving economic conditions in the country.
"With an improving economic outlook for the UK ... and
substantial progress on capital made by domestic UK banks in
2013, we believe that the relative attractions of the domestic
UK banks sector have improved compared to HSBC and StanChart
, which face headwinds within some EM economies," the
bank's analysts said in a note.
The more positive macro backdrop in Britain was underpinned
on Wednesday by data showing the unemployment rate in July
dropped to its lowest since late last year.
On the downside, however, Kingfisher fell 2.2 percent after
the firm said consumer confidence remained weak in its major
markets, France and Britain, spurring profit taking in the
shares which have risen 44 percent in the past six months.
The stock trades at 16.3 times its expected earnings for the
next 12 months, its highest multiple since 2009, Thomson Reuters
Volume on Kingfisher was close to its full-day average for
the past three months, compared to just over a third of the
broader FTSE 100 index.
Five FTSE 100 stocks, including insurer Admiral Group
, started trading without their dividend
entitlements on Wednesday, knocking up to 1.4 points off the
(Reporting By Francesco Canepa. Editing by Jane Merriman)