FTSE flat; gains in miners, insurers offset by weak oils

                                
 * Miners rally as metal prices firm
                                
 * Life insurers strong on M&A speculation led by L&G
                                
 * Oils majors weak on demand concerns
                                
 
                                
 By Jon Hopkins
                                
 LONDON, Sept 30 (Reuters) - Britain's top share index was
flat at midday on Wednesday as gains by miners, life insurers
and banks in the last session of a strong quarter was countered
by weakness in oil majors and retailer Marks & Spencer <MKS.L>.
                                
 By 1109 GMT the FTSE 100 <.FTSE> was 0.7 point higher at
5,160.43 and on course for its best quarterly performance since
the index was launched in 1984.
                                
 Hefty gains over the course of the summer have seen British
blue chips rise 21.4 percent in the three months to September,
although the index is still 4.7 percent below its level just
over a year ago before the collapse of Lehman Brothers.
                                
 "The rally has undoubtedly been impressive, but is it
sustainable over another quarter?," said David Jones, chief
market strategist at IG Index.
                                
 "Perhaps because of this sort of question, there is a note
of caution lingering over the UK index today as traders take
stock before a new month begins," he said.
                                
 Miners were the best performing sector, having lagged in
Tuesday's session with market heavyweights benefiting from
firmer metal prices as the dollar lost some recent strength.
                                
 Lonmin <LMI.L>, Anglo American <AAL.L>, Xstrata <XTA.L> and
Rio Tinto <RIO.L> added 0.8-2.6 percent.
                                
 Life insurers also saw strong demand with the sector boosted
by a resurgence of M&A speculation.
                                
 Legal and General was a top FTSE 100 riser, up 5.5 percent
following recent reports it could be a target for a number of
companies, and supported too as Deutsche Bank raised its rating
on the firm to 'hold' from 'sell'.
                                
 RSA Insurance <RSA.L>, Aviva <AV.L>, Standard Life <SL.L>,
and Prudential <PRU.L> also rallied 1.6-4.4 percent, underpinned
by Deutsche Bank's upbeat note on life insurers.
                                
  Banks were higher as a sector, with RBS <RBS.L>, Lloyds
Banking Group <LLOY.L>, Barclays <BARC.L> and Standard Chartered
<STAN.L> all up 0.4-1.8 percent as recent cash calls from peers
reassured investors about the path of recovery
                                
 Among other financials, Man Group <EMG.L> rose 5.5 percent
after the hedge fund manager said currency movements and slowing
outflows lifted funds under management to an estimated $43.8
billion at end-September, at the top end of forecasts.
                                
 Software company Sage Group <SGE.L> climbed 2.9 percent
after Morgan Stanley upped its stance to 'overweight' from
'equal-weight' as it turns to stock picking in the technology
sector for what it describes as the next leg of recovery.
                                
 
                                
 M&S WEAK AFTER UPDATE
                                
 Marks & Spencer <MKS.L> shed 1.8 percent after a
second-quarter trading update brought on profit-taking.
                                
 Analysts said better-than-expected sales and profit margins
were factored into a recent rally in M&S shares, while a
downgrade in its cost guidance was not. [ID:nLT484259]
                                
 Clothing retail peer Next <NXT.L> shed 1.5 percent.
                                
 Oil majors were a drag on demand concerns after weak U.S.
consumer confidence data on Tuesday although crude <CLc1> prices
held above $67 a barrel on the back of a weak dollar.
                                
 BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L>, and
Tullow Oil <TLW.L> shed 0.1-0.6 percent.
                                
 Thomas Cook <TCG.L> was the biggest FTSE 100 faller, down
3.2 percent after the tour operator's fourth-quarter trading
update failed to impress. [ID:nLU063347]
                                
 Reed Elsevier <REL.L> shed 1.4 percent with Goldman Sachs
said to be placing 22 million shares in the publishing group on
behalf of an institutional investor, according to traders.
                                
 U.S. stock indices looked set to bounce back after falls on
Tuesday following disappointing consumer confidence numbers.
                                
 Attention this afternoon will be on the final reading for
second quarter U.S. GDP, due at 1230 GMT, which was forecast to
show the economy shrank at an annualised rate of 1.2 percent.
                                
 And U.S. ADP employment figures for September, due at 1215
GMT, were expected to show a drop of 210,000.
                                
 Meanwhile, British consumer morale saw its biggest one-month
jump since 1995 in September to notch its highest level since
January 2008, the GfK/NOP consumer confidence barometer showed
on Wednesday. [nLAG003790]
 (Editing by Dan Lalor