Britain's FTSE weak on global growth concerns

* FTSE 100 down 0.2 percent, yo-yoing around 5,800

* Ex-dividends account for about third of the fall

* Gains by miners, banks underpin the blue chips

By Jon Hopkins

LONDON, Oct 10 (Reuters) - Britain's top shares edged loweron Wednesday, tracking falls on Wall Street and in Asia onconcerns over the global growth outlook, although gains inheavyweight miners and banks provided a floor under the FTSE 100index around the 5,800 level.

At 0805 GMT, the FTSE 100

index was down 12.45points or 0.2 percent at 5,797.80, having shed 0.5 percent onTuesday after the International Monetary Fund issued a downbeatview on global economic growth.

"There does not seem to be a great deal of conviction in themarket ... There are a whole range of factors driving the marketin the background, potentially one way or the other, with theresults season just adding a touch of nerves after Alcoa'soutlook downgrade," said Keith Bowman, equities analyst atHargreaves Lansdown.

Metals group Alcoa

kicked off the U.S. third-quarterearnings season after Wall Street's close on Tuesday. Thegroup's third-quarter profit beat market expectations, despiteweak prices, but it lowered its global aluminium consumptionoutlook for 2012 mainly due to a slowdown of demand in China.


, however, shrugged aside the mixedmessage from Alcoa and led the FTSE 100 gainers with the sectorfocused on fresh signs of pro-growth policies by Beijing, theworld's biggest consumer of many metals.

Chinese state-backed media on Wednesday pointed to freshpolicies to stabilise the world's second-largest economy. In oneof the policies mentioned, China is likely to offer incentivesto spur vehicle sales in rural areas to boost consumption andsupport a slowing economy.

British bankswere also in demand led bypart-nationalised lenders Lloyds Banking GroupandRoyal Bank of Scotland, the top two FTSE 100 gainers up3.5 percent and 2.3 percent respectively.

Britain's Financial Services Authority has relaxed capitaland liquidity rules on banks in an effort to stimulate lendingand use bank regulation to moderate the economic cycle, theFinancial Times reported on Wednesday.

"These (RBS and Lloyds) are the two banks which are mostexposed, along with Barclays. If they get a bit of leeway fromthe regulator, that's breathing space for these banks, which inshort term is good for the shares. Longer term I stay verycautious," said Chirantan Barua, senior analyst at BernsteinResearch.

Stocks trading ex-dividend, where investors no longerqualify for the companies' latest dividends, knocked 2.87 pointsoff the FTSE 100 index on Wednesday, after the resultingadjustment to prices by market-makers.

Kingfisher, Smith & Nephew, Tesco,Wolseleyand WPP Groupwere all trading withouttheir dividend entitlements.

Smith & Nephew was the biggest blue chip faller, losing 2.6percent after Societe Generale restarted coverage on theorthopaedics firm's stock with a "sell" rating.

"Given downside risk to the consensus EPS forecasts, anunappealing valuation, and an M&A overhang, we reinitiatecoverage with a Sell rating. The upside risks are unlikely toalter our view until 2014," the broker said in a note.

(Reporting by Jon Hopkins; Editing by Andrew Heavens)


Messaging: jon.hopkins.thomsonreuters.com@reuters.net))


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