* FTSE 100 flat
* Miners fall as metal prices drift lower
* ITV tops gainers on bid talk
By Michael Taylor
LONDON, Aug 12 (Reuters) - Britain's leading blue-chip index
was flat by midday on Tuesday as mining shares tracked falling
metal prices, while ITV <ITV.L> gained for a third straight
session on persistent bid speculation.
At 1033 GMT the FTSE 100 <> was flat at 5,544.2 points,
making good losses earlier in the session after Russia ordered a
halt to military operations in Georgia following five days of
fighting.
The benchmark index was however, little affected by a report
which showed UK consumer price inflation in July rose more than
expected.
On the downside, metal prices eased as investors shifted
some of their money back to the dollar, which weighed on mining
stocks.
Rio Tinto <RIO.L>, BHP Billiton <BLT.L>, Eurasian Natural
Resources <ENRC.L>, Anglo American <AAL.L>, Xstrata <XTA.L>,
Ferrexpo <FXPO.L>, Vedanta Resources <VED.L> and Lonmin <LMI.L>
were down 0.2 to 3.2 percent.
Topping the FTSE 100 leaderboard, British free-to-air
broadcaster ITV <ITV.L> added 9 percent to reach its highest
level in more than six weeks as traders cited lingering market
talk of a possible bid from TV producer Endemol.
Such talk had helped ITV rise 6.3 percent in the previous
session.
Some analysts doubted whether a takeover was on the cards.
"In reality, Endemol is unlikely to be interested in ITV's
broadcasting assets from which it would be very difficult to
separate the content business," said UBS analysts in a note to
clients.
"Endemol would also lose its independent producer status in
the UK."
In other sectors, banks were mixed after Switzerland's UBS
<UBSN.VX>, which has been Europe's hardest-hit victim of the
credit crunch so far, reported a second quarter net loss of 358
million Swiss franc ($332 million), slightly worse than
expected. []
"It is a bit of a wake up call that we are not out of the
woods yet," said Tim Hughes, head of sales trading at IG Index.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, and HSBC
<HSBA.L> rose 0.5 to 1.7 percent, while HBOS <HBOS.L> and Lloyds
TSB <LLOY.L> were down 0.1 to 1.3 percent.
Standard Chartered <STAN.L> lost 3.6 percent to 1,541 pence,
after Citi downgraded the Asia-focused lender to "sell" from
"hold" and cut its price target to 1,300 pence from 1,525 pence.
Broker RBS also trimmed its target price on StanChart to
1,660 pence from 1,700 pence and kept a "hold" rating.
The Financial Times said nearly 60 percent of U.S. and
European institutional investors surveyed by Greenwich
Associates believed another big financial firm would collapse
within the next six months in the continued fallout from the
credit crunch.
"The UBS loss does make a difference on sentiment," said
Howard Wheeldon, senior strategist at BGC Partners.
Also on the economic front, the Royal Institution of
Chartered Surveyors said British house prices fell slightly less
than expected in the three months to July, but the number of
completed sales per surveyor fell to their lowest level in at
least 30 years. []
Another survey showed commercial building activity in
Britain continued to contract sharply in July but property
developers were slightly less gloomy about the future than a
month earlier. []
Marks & Spencer <MKS.L> shed 2.1 percent after HSBC
downgraded the retailer to "neutral" from "overweight".
InterContinental Hotels <IHG.L> gained 2.6 percent after the
world's largest hotelier reported a 29 percent rise in
first-half operating profits, but said growth had slowed in the
second-quarter, particularly in the United States.
"Just a few weeks ago, the FTSE was flirting with 5,000 but
now it is 500 or so points higher," said Manoj Ladwa, senior
trader at TradIndex. "If the FTSE closes higher today, then it
confirms the recent bullish run and suggests the market is happy
to shrug off bad news. How long that mood will last remains to
be seen."
(Additional reporting by Dominic Lau; editing by Rory
Channing)
