June 5, 2014 / 10:11 AM / in 3 years

Weak mining stocks push down UK's FTSE ahead of ECB

* FTSE 100 down 0.3 pct

* ECB expected to cut rates later on Thursday

* Mining stocks fall after weak Chinese data

* Smith & Nephew up on report of Medtronic bid interest

By Sudip Kar-Gupta

LONDON, June 5 (Reuters) - Britain’s top equity index fell on Thursday, weighed down by a drop in mining stocks after data showed that services sector growth in major metals consumer China had slowed down.

Traders were also waiting to see if the European Central Bank (ECB) meeting later in the day would yield fresh economic stimulus measures, as expected by many investors, before making their next move.

The blue-chip FTSE 100 index was down by 0.3 percent, or 17.97 points, at 6,800.66 points by the middle of the trading day.

The FTSE 350 Mining Index fell 0.5 percent after data showed that growth in China’s services sector had retreated to a 4-month low in May.

“We’re not a huge fan of the mining sector right now, and we also believe that gold and silver prices will come down,” JNF Capital trader Rick Jones said.

Medical technology company Smith & Nephew bucked the weaker market to rise 5.1 percent after a media report that U.S. rival Medtronic was looking at bidding for it. Smith & Nephew declined to comment on the report.

The ECB is poised to impose negative interest rates on its overnight depositors, seeking to cajole banks into lending and to prevent the euro zone from falling into Japan-like deflation.

But since many investors view these steps as having already priced into stock markets, any disappointment could result in a pullback.

Mike Mason, senior trader at Sucden Financial Private Clients, said that if the FTSE failed to hold above the 6,800 point level, it could then fall further down to the 6,720-6,760 points range. (Additional reporting by Tricia Wright)

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