* FTSE 100 up 0.4 percent
* Miners bounce back on Chinese stimulus bets
* Meggitt rises after UBS upgrade
By Francesco Canepa and Tricia Wright
LONDON, March 21 (Reuters) - Britain’s top shares looked set to snap a three-weak losing streak on Friday as mining stocks rose, boosted by hopes that China, the world’s top metals consumer, would take more steps to stimulate its economy.
The FTSE 350 Mining index, down some 10 percent from a late February peak and held back by worries over the pace of Chinese growth, led the market higher with a 1.2 percent advance, building on a 0.6 percent spike on Thursday.
Some investors are starting to buy into the sector’s recent dip on speculation about new stimulus measures from China, where authorities have given indications they are considering moves to support slowing economic growth.
“An interesting short-term buying opportunity as China is rumoured to add some stimulus which would benefit especially the large international mining companies,” Hampstead Capital hedge fund manager Lex van Dam said.
China’s health is a key factor for the FTSE 100, given the mining sector’s heavy weighting. It is the fourth-biggest sector within the UK benchmark, accounting for almost 9 percent of the index, data from index compiler FTSE showed.
Shares in mining stocks added 7.5 points to the FTSE 100 was up 26.86 points, or 0.4 percent, at 6,569.30 points by 1138 GMT. The index was up 0.6 percent for the week after three straight weekly losses.
Mining shares have swung widely over the past year as investors factored in slower GDP growth in China, where authorities are trying to engineer a shift to a more consumer-focussed economy from an export-driven one without strangling growth.
“People are still quite obsessed with the exact (GDP) number and whether the Chinese government will do something,” said Jade Fu, investment manager at Heartwood Investment Management, which has around 2 billion pounds ($3.30 billion) under management. “As long as people are focused on that number, we will see volatility.”
Underperforming basic-resources shares have hampered the FTSE’s progress, with is roughly at last June’s level. The euro zone’s Euro STOXX 50 index has risen more than 10 percent.
The British index has tested the bottom of its rising channel stretching back to August 2013 at 6,500, and some technical analysts see scope for further growth.
Valerie Gastaldy, head of technical analysis firm Day-By-Day, said the index could hit 6,684, previously both a support and resistance level, and maybe the year’s high, around 6,867.
Aircraft parts supplier Meggitt also notched up good gains, rising 1.4 percent, after UBS upgraded the stock to “buy” from “neutral”. The investment bank argued that Meggitt’s recent share price fall - down by roughly 10 percent since the start of 2014 - has been overdone.
Trading volumes in Meggitt came in at around a quarter of the stock’s three-month average daily volume - above those for the FTSE, where volumes only stood at around a tenth.
$1 = 0.6057 British Pounds Additional reporting by Tricia Wright and Sudip Kar-Gupta; Editing by Larry King