UPDATE 1-Defensives cushion FTSE losses as Shire soars

* FTSE index flat, regains 7,000-point level

* Shire soars on possible Takeda takeover bid

* Defensives rise, miners and energy stocks fall

* Unilever, Capita move higher (Recasts, adds detail and quote, updates prices)

LONDON, March 28 (Reuters) - A move into defensive stocks helped Britain's FTSE avoid a broader sell-off on Wednesday caused by concern over the U.S. tech sector. Shares in pharma firm Shire surged.

Shire Plc soared around 17 percent after Japan's Takeda Pharmaceutical Co said it was considering a possible offer for the British drugmaker.

"We see the possible strategic fit given the Japanese pharma's focus therapeutic areas of oncology, gastrointestinal and neuroscience, with Shire bolstering the latter two franchises," analysts at Jefferies said in a note.

The gains in Shire helped the FTSE recover its losses on the day, as bad news about U.S. tech giants and fears of a trade war fueled concern over valuations across global equities.

The FTSE 100 index traded flat in percentage terms at 7,000.59 points by 1158 GMT. Gains for defensive, bond-proxy-type stocks offset falls among cyclical sectors such as mining and energy.

Global trade tensions hit the value of key metals such as copper, and a surprise increase in U.S. crude inventories sent Brent crude futures back below $70 a barrel.

Tech stocks were under pressure amid signs that regulators might rein in the sector following years of strong growth and privacy concerns around Facebook and Google.

Facebook shares are now down 15 percent this month. Twitter shares tumbled overnight after short-seller Citron Research called the stock "most vulnerable" to privacy regulations.

"Everyone wants to know how far this tech sell-off has to go and how much it affects everyone else," said IG's Chris Beauchamp. "People can cope with a modest sell-off, but when you get to these proportions and it hits the strongest performers so hard ... it sends the signal that others can be vulnerable, too."

Defensive stocks such as utilities, however, gained as investors bought back into sectors that have been relatively unloved as bond yields marched higher, rendering their big dividends less attractive.

Unilever was also among top FTSE gainers, rising 2.5 percent after UBS upgraded the consumer goods giant to "buy" on expectations of improving volume growth and operating margin expansion.

Capita rose 1.8 percent after a person familiar with the matter said the outsourcing firm would publish a five-year transformation plan and details of a rights issue with its annual results on April 26. (Reporting by Tom Pfeiffer and Kit Rees, editing by Larry King)