* FTSE 100 falls 0.3 pct, below key support level
* Burberry, insurers hurt by Japan worries
* Energy firms, miners gain ground
By Simon Falush
LONDON, March 14 (Reuters) - Britain's top shares fell by
midday on Monday as a massive earthquake in Japan kept risk
appetite depressed and hit Burberry and insurers, but the
disaster boosted energy firms, limiting losses.
By 1206 GMT, the FTSE 100 <> was down 19.87 points or
0.3 percent at 5,808.80.
Technical indicators suggested that the index is vulnerable
to further significant weakness.
The index was below 5,812, the 50 percent Fibonacci
retracement of the November low to the February high. The next
support, a 61.8 percent retracement is at 5,744.
Analysts said fundamentals would also make it hard for
equities to make much progress in the coming months.
"We're likely to see a peak in leading indicators, there
will be the start of a new interest rate cycle and the oil price
is higher than it has been, so the sweet spot we saw for
equities won't be so sweet," said Graham Secker, European equity
strategist at Morgan Stanley.
He added that the bank had moved to a more defensive stance,
with telecoms looking particularly favourable.
The earthquake in Japan had a mixed impact on UK equities,
with fashion group Burberry <BRBY.L> topping the list of
fallers, shedding 5.1 percent as investors worried about the
impact on demand for high-end products. []
UK-listed insurers were also hit by the quake as sentiment
on the sector was damaged, although few have exposure to losses
in Japan. Standard Life <SL.L> fell 2 percent while Resolution
<RES.L> slipped 2.3 percent.
POWER LIFT
However temporary power supplier Aggreko <AGGK.L> topped the
list of gainers, up 5.5 percent, while energy firm BG Group
<BG.L> gained 2.8 percent as it was seen benefiting from extra
demand after Japan's nuclear energy supply was severely damaged
in the earthquake.
Both these stocks saw extremely heavy volumes traded.
"Disruptions to nuclear power supply could see Japanese
(liquid natural gas) demand increase. This would reduce global
LNG oversupply, and support a recovery in European gas & power
prices," UBS said in a note.
Xstrata <XTA.L> and mid-cap Drax Group <DRX.L> which supply
coal, also benefited as the demand outlook for non-nuclear
energy sources perked up.
Other miners also supported the index, with Rio Tinto
<RIO.L> up 0.7 percent after it edged closer to gaining control
of coal producer Riversdale Mining <RIV.AX> after a $3.9 billion
sweetened bid rallied more shareholders to accept the offer.
The fact that turmoil in the Middle East has not spread
further despite continuing violence in Libya is also helping
prevent sharper falls, investors said.
"The fact that there have not been more riots in the Middle
East, even though Gaddafi is killing his own people, means that
some worries are being eased," said Steven Bell director of the
GLC Global Macro Program which has $600 million under
management.
Heavyweight Vodafone <VOD.L> was a significant drag on the
index, slipping 1.6 percent after the Financial Times said
European telecoms and entertainment group Vivendi <VIV.PA> is
not willing to pay much more than 6 billion pounds ($9.6
billion) for Vodafone's stake in SFR.
(Editing by Hans Peters)
