FTSE see-saws; RBS boosts banks but Vodafone drags

                                
 * FTSE dips 0.1 pct
                                
 * Royal Bank of Scotland rises after first-half results
                                
 * Goldman pulls Vodafone lower; commodities under pressure
                                
 
                                
 By Amanda Cooper
                                
 LONDON, Aug 8 (Reuters) - Britain's leading share index was
little changed by midday on Friday, as gains in the banking
sector after Royal Bank of Scotland's <RBS.L> results were
offset by losses in the miners and index-heavyweight Vodafone
<VOD.L>.
                                
 RBS was one of the top gainers on the FTSE 100 <.FTSE> after
the company reported one of the largest losses in British
corporate history, but the loss was not as large as many in the
market had feared, which sent the stock up 3 percent.
                                
 At 1043 GMT the FTSE 100 was down 7.4 points, or 0.1 percent
at 5,470.9 after falling 0.2 percent on Thursday, but was on
track for a 2 percent gain for the week.
                                
 The index is now down about 15 percent this year.
                                
 RBS posted a first-half loss of 691 million pounds ($1.35
billion) -- one of the biggest losses in UK corporate history,
but smaller than expected -- after taking a 5.9 billion
writedown on the value of risky assets. [ID:nL8509793]
                                
 "We continue to get news out of the banks that is perhaps
not as terrible as some had feared, although you can look at it
two ways. One way is the headline results are not as bad, but
the outlooks given are really quite gloomy," said Investec UK
strategist Roger Cursley.
                                
 "On a different day, the market could have put a different
spin on these results, so in a sense we're trying to accentuate
the positives a bit today," he said.
                                
 A Reuters poll of analysts gave an average forecast of a 1.2
billion pound loss for RBS.
                                
 Other banks to feature among FTSE 100 gainers included HSBC
<HSBA.L>, which was the largest individual positive weight on
the index, rising 1 percent, while Standard Chartered <STAN.L>
was up 1 percent and HBOS <HBOS.L> was up 0.2 percent.
                                
 
                                
 LOSS ON CARDS
                                
 "It was widely expected there would be a loss for RBS,
although it is significantly less than some analysts were
predicting," said Richard Hunter, head of UK equities at
Hargreaves Lansdown Stockbrokers.
                                
 "It is one of those strange situations, and we saw it with
Barclays <BARC.L> yesterday and is rather a sign of the times,
that while the figures are bad they're not as bad as they could
have been."
                                
 "That sort of perverse logic is the reason the shares have
lifted," Hunter added. "If you had to scratch for a positive,
you'd say it's one more set of credit writedowns out of the way
which must get us somewhere nearer to potentially turning the
corner."
                                
 In other financials, asset manager Schroders <SDR.L> was 1.5
percent lower after it said pretax profit in the first half of
the year fell to 135.7 million pounds ($264.8 million) from
185.6 million pounds a year ago.
                                
 Thursday's decision by the Bank of England to leave
benchmark UK rates at 5 percent reinforced the view among
investors that the central bank is unlikely to tighten monetary
policy again this year.
                                
 Although the economy is slowing, the prospect of steady
policy is potentially supportive for interest-rate sensitive
sectors such as financials and property stocks.
                                
 However, with concern about slowing U.S. consumer spending
after a cautious sales forecast for world number one retailer
Wal-Mart <WMT.N> on Thursday and a disappointing update from top
insurer AIG <AIG.N>, the mood in financial markets was wary.
                                
 Heavyweight Vodafone <VOD.L> lost 1.7 percent after Goldman
Sachs cut its rating to "neutral" and took the mobile phone
group off its "conviction buy" list of preferred stocks.
                                
 Commodity stocks came under pressure, but gas producer BG
Group <BG.L> bucked the trend to add 0.6 percent after it said
it had made a material new oil discovery off the coast of
Brazil. [ID:nL8512227]
                                
 But with U.S. crude prices <CLc1> falling 2 percent, BP
<BP.L> and Shell <RDSa.L> lost 1.6 and 1.4 respectively.
                                
 Lonmin <LMI.L> was up 0.4 percent after the Financial Times
said that M&G, the biggest shareholder in the London-based
platinum producer, had rebuffed Xstrata's <XTA.L> hostile offer.
Xstrata shares fell 1.9 percent.
                                
 British Airways <BAY.L> advanced 2.6 percent after the Daily
Mail said the airline is planning to make an application early
next week to the U.S. Department of Transport that could allow
it to forge closer links with American Airlines <AMR.N>.
 (Additional reporting by Michael Taylor; Editing by Greg
Mahlich)