* FTSE 100 down 0.2 pct; Brent up at over $113
* Rolls-Royce up on Tognum bid plans
* Tullow Oil falls on scant Uganda update
By Tricia Wright
LONDON, March 9 (Reuters) - Britain's top shares edged lower
on Wednesday as six stocks went ex-dividend and investors
nervously watched oil prices climb on intensified fighting in
Libya.
By 1214 GMT, the FTSE 100 <> was down 13.76 points, or
0.2 percent, at 5,961.00, having eked out a modest gain in the
previous session.
Ex-dividend factors accounted for most of the index's
decline, with BHP Billiton <BLT.L>, British American Tobacco
<BATS.L>, Hammerson <HMSO.L>, Serco <SRP.L>, Shire <SHP.L> and
Standard Chartered <STAN.L> all losing their payout attractions.
"Traders continue to trade sensitively to any spike in the
price of crude oil," Joshua Raymond, market strategist at City
Index, said.
"As long as you've got Brent crude above $110 threatening to
break out at $120 if anything escalates... in the Middle East
outside Libya, then it's going to hamper buying demand in the
short term for equities."
Brent crude <LCOc1> advanced 51 cents to $113.57 on
Wednesday as fighting intensified in Libya, and OPEC said it saw
no need to hold an emergency meeting to ease oil supply fears.
Energy stocks bore the brunt of investors' deteriorating
appetite for risk, with banks also weighing heavily as fears
resurfaced about the euro zone sovereign debt crisis.
The market was digesting the outcome of Portugal's bond
auction. Portugal successfully sold two-year bonds on Wednesday,
but the cost of borrowing was the most expensive since it joined
the euro, keeping alive concerns it will need to request an
international bailout.
"Oil is an ongoing theme. Libyan sabre-rattling is keeping
investors a little bit on edge," a trader at a London-based
brokerage said.
ROLLS-ROYCE BOOSTED
Rolls-Royce <RR.L> gained 2.8 percent after the British
aerospace engine manufacturer and German automotive group
Daimler <DAIGn.DE> said they would bid 3.2 billion euros ($4.44
billion) for industrial diesel engine maker Tognum.
"Rolls-Royce is quite wealthy at the moment. We wanted to see
an acquisition and this is one that makes sense," Howard
Wheeldon, a strategist at BGC Partners, said.
Wheeldon said sentiment surrounding Rolls-Royce was further
helped by a contract win, announced on Wednesday, from Cathay
Pacific <0293.HK> for Trent 700 engines to power 15 Airbus A330
aircraft, and the fact the airline sector is in good health.
This, he said, was amply demonstrated by results from Cathay
Pacific Airways <0293.HK>, with International Airlines Group
<ICAG.L> among the top blue chip risers, up 2.9 percent, on a
positive read-across, according to traders.
Britain's biggest insurer Prudential <PRU.L> jumped 4.6
percent after the company's results beat consensus and it said
investors would get a payout of 23.85 pence per share, up 20
percent and outstripping the 21 pence expected by analysts.
Share trading volumes were nearly 112 percent of the 90-day
daily average by midday.
Tullow Oil <TLW.L> was among the biggest blue-chip fallers,
off 1.9 percent after the explorer's results lagged forecasts
and it gave scant detail on a key Ugandan project.
(Editing by Erica Billingham)
