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* FTSE 100 steady, hovering close to 2013's peak levels
* FTSE 100 flat in early session trading
* Gains in mining stocks add most points to FTSE 100
* Citigroup upgrades its position on miners to "bullish"
By Sudip Kar-Gupta
LONDON, Jan 16 (Reuters) - Britain's top equity index steadied close to last year's peak levels on Thursday, with the market propped up by gains in major mining stocks.
The blue-chip FTSE 100 index, which on Wednesday had closed at an eight-month high, was flat at 6,823.99 points in early session trading - hovering close to its 2013 peak of 6,875.62 points.
JNF Capital trader Rick Jones said the FTSE would eventually hit an all-time high of 7,000 points this year, but added he was first waiting to see if it could break and hold above the peak levels that had been set last year.
"I'm still fairly bullish but we've got to first see the market test and break above last year's highs. Failure to do so could lead to it slipping back momentarily," he said.
Mining stocks added the most points to the FTSE. The FTSE 350 Mining Index rose 1.6 percent while Rio Tinto gained 1.4 percent after reporting big increases in production.
The mining sector was the worst-performing equity sector in 2013. The industry was dogged by concerns over a possible slowdown in economic growth in China, which is the world's biggest metals consumer.
However, analysts at U.S. bank Citigroup on Thursday said the mining sector was due for a rebound.
Citi upgraded its rating on the sector to "bullish" from "neutral" - marking the first time it had taken such as position on the mining industry in three years.
The U.S bank said an upturn in the European and U.S. economies could offset any slowdown in China.
"Improvements in European and U.S. growth are supportive for commodities and weakening commodity currencies are providing a fillip for the miners," it wrote in a note.
The FTSE 100 rose 14.4 percent in 2013 to post its best annual gain since 2009. The index has gained around 1 percent so far since the start of 2014.