* FTSE 100 up 0.3 pct, but still below 6,900 level
* Miners rebound after rise in Chinese factory activity
* Property sector shrugs off disappointing mortgage data
* AstraZeneca advances after positive data on products
* Standard Life drops on reported UK pensions shake-up (Adds closing prices)
By Sudip Kar-Gupta and Lionel Laurent
LONDON, June 2 (Reuters) - Britain’s top share index inched higher on Monday as upbeat Chinese factory data lifted mining stocks and as homebuilders shrugged off worse-than-expected mortgage approval data.
The blue-chip FTSE 100 index closed up 0.3 percent, or 19.59 points, at 6,864.10 points.
Mining stocks across Europe, including London-listed Rio Tinto and BHP Billiton, rose after data showed that Chinese factory activity expanded at its fastest pace in five months in May.
Mining stocks are particularly sensitive to the state of the economy in the world’s biggest metals consumer. The sector fell on Friday on concerns about a possible economic slowdown there.
“Given that the (mining) sector has been pretty unloved recently, relating to ongoing concerns regarding Chinese growth, any bit of positive news on China will help,” HSBC equity strategist Robert Parkes said.
The FTSE 350 Mining Index - which fell 16 percent in 2013 - was up 1.6 percent.
Homebuilder Barratt Developments also outperformed, rising 1.2 percent, after Goldman Sachs upgraded the stock to “buy” from “neutral”.
Other property stocks such as Persimmon and Hammerson also rose despite the news that British mortgage approvals fell more than expected in April to their lowest level in nine months.
While the data suggested that new rules on bank lending have taken some of the heat out of the housing market, analysts said this was balanced by the expectation that policymakers would not rush to restrict money supply, as well as by a robust UK PMI survey for May.
British manufacturing activity kept expanding at a rapid pace last month, the survey showed, indicating the economic recovery has lost little of its shine this quarter.
“We’ve had a fairly robust PMI indicator out of the UK this morning,” said HSBC’s Parkes. “That will help domestically focused stocks.”
Beverage-bottling stocks Coca-Cola HBC and Rexam were up 3.4 percent and 2.1 percent respectively, with traders saying investors were coming back to the former after a 20 percent drop in its share price year-to-date and to the latter after a 450 million-pound cash return.
Pharmaceuticals group AstraZeneca, whose shares have lost ground over the last month after U.S. rival Pfizer walked away from its bid, saw its shares rise 2 percent after the company got positive data for two of its products.
On the downside, shares of insurer Standard Life fell 1.7 percent after media reports said a move to a collective pensions system would be formally put on Britain’s legislative agenda later this week.
“The thinking is that the government will introduce collective pensions, as they have in the Netherlands, whereby pensions’ money is pooled and this brings charges down,” Sanford C. Bernstein analyst Edward Houghton said. “Ultimately, people are thinking margins are coming down on pensions.”
The FTSE 100 has risen by nearly 2 percent since the start of 2014, and hit 6,894.88 points last month, its highest level since December 1999.
However, some traders said the index remained prone to short-term pull-backs if it continued to fail to break above the 6,900 point level in order to challenge a record 7,000-point target.
“I‘m still concerned that the FTSE has not broken out above the previous highs yet,” Hantec Markets analyst Richard Perry said. (Editing by Louise Ireland and Susan Fenton)