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UPDATE 1-Britain's FTSE rebounds as earnings in focus, GKN tumbles

* FTSE 100 inches up 0.2 pct, mid caps up 0.8 pct

* GKN hits 16-month low as CEO-designate ditched

* Energy shares fall after Norway wealth fund proposes dropping oil, gas stocks

* Well-received results support British Land, 3i (Adds detail and quote, updates prices at close)

MILAN, Nov 16 (Reuters) - The UK's top share index shrugged off weakness from oil stocks on Thursday as a handful of earnings updates were in focus, though GKN plunged on uncertainty following the ditching of its CEO designate.

The FTSE was up 0.2 percent at 7,386.94 points at its close, with gains in the healthcare and consumer sectors offsetting weaker commodity stocks. Midcaps were up 0.8 percent.

Oil stocks were among the top fallers on the FTSE, hit after Reuters reported that Norway's trillion-dollar wealth fund proposed to drop oil and gas companies from its benchmark index.

This would mean the fund cutting its investment in those companies. Shares in Royal Dutch Shell and BP, in which the fund holds a stake, fell 2.9 percent and 0.8 percent respectively.

Some investors, however, were not immediately concerned.

"Nothing is imminent and even if the advice is fully implemented we believe this will have limited impact on the Oil & Gas producers, as the holdings of Norges Bank are relatively small and no doubt will be disposed of over an extended time frame, Liz Dhillon, equity analyst at Quilter Cheviot, said in a note. Norges Bank Investment Management manages Norway's sovereign wealth fund.

Elsewhere, GKN's shares dropped after the firm said that CEO-designate Kevin Cummings was leaving. This followed a second large writedown at the aerospace division Cummings used to run.

The shares ended 4.8 percent lower, after falling as much as 12 percent to their lowest level in 16 months.

"After such upheaval, it is not clear what the next stage in GKN's development will be, but it could be profound change," analysts at Jefferies said in a note.

Mediclinic was down 2.7 percent after South Africa's largest private hospital group reported an 11 percent drop in first-half underlying profit.

Royal Mail rose 1.7 percent in volatile session which saw its shares dip into negative territory at one point.

Strong growth at its European parcels business helped the company to beat first-half profit forecasts, though it warned a labor dispute could hit its second-half performance.

Well-received earning updates lifted shares in private equity firm 3i Group and property company British Land which rose both more than 2 percent.

Data showing that British retail sales recorded their first year-on-year decline since 2013 last month had no impact on the main benchmark indices.

Worries over a slowing British economy has discouraged some investors from taking exposure to domestic stocks, as households battle with fast-rising prices and Brexit talks drag on.

"We don't have a huge exposure but I think it's fair to say the UK domestic plays are finding the environment far tougher than for the Europeans on the continent," said Andrew King, head of European equity strategy at BNP Paribas Investment Partners.

"The UK economy is struggling a bit undoubtedly because of Brexit concerns," he added. (Reporting by Danilo Masoni, Helen Reid and Kit Rees; Editing by Richard Balmforth)