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Britain's FTSE bounces off lows after mining sector turnaround

Mon, 10th Aug 2015 14:59

* FTSE 100 flat

* Miners reverse falls after weak China data on stimulusbets

* esure falls sharply after results miss consensus (Adds detail, prices)

By Alistair Smout and Liisa Tuhkanen

LONDON, Aug 10 (Reuters) - Britain's top share indexrecouped early losses on Monday, as major mining stocks that hadbeen hit by weak data from China turned higher on hopes ofstimulus.

The blue-chip FTSE 100 index was down just 2.69points, flat in percentage terms, at 6,715.80 points by 1445GMT, trimming losses after gains in early trade on Wall Street.The index is up nearly 2 percent since the start of 2015 but issome 6 percent below an April record high of 7,122.74 points.

The moves came in thin trade of just three-quarters of the90-day average volume.

Miners, which account for around a tenth of the FTSE 100 interms of market capitalisation, recouped their early losses.While weak China data had hit copper, mired at a six-year low,it rallied on hopes that it may prompt further stimulus fromChinese authorities.

Jeremy Batstone-Carr, market analyst at Charles Stanley,remained cautious on the mining sector, and said that weak datamay result in China devaluing its currency.

"The pressure is rising on China to devalue ... which wouldsupport China's equity but not help metal prices or UK-listedminers," he said.

Oil stocks were some of the most heavyweight fallers,trimming five points off the index as the poor China data alsosent Brent crude to a six month low, before rebounding slightly.

Among mid caps, insurance company esure dropped 9.8percent after its interim results marginally missed analysts'consensus forecast, hit by weakness in its motor insurancebusiness.

"The company posted a massive 81 percent drop in tradingprofit from its motor insurance arm, decidedly offsetting a risein premiums in other areas of the business," Augustin Eden,analyst at Accendo Markets, said in a note. (Editing by Robin Pomeroy)

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