* FTSE 100 index down 0.1 pct
* Miners reverse as euro zone data disappoints
* Energy stocks gain with crude on China PMI data
* Cigarette maker BAT weak after trading update
LONDON, Oct 24 (Reuters) - Britain's top shares were a touch
lower on Wednesday, an early rally petering out after poor euro
zone data offset brighter news from China.
Firmer energy stocks provided the main
underlying support, helped by gains in Brent crude, which
snapped a six-day losing streak after PMI data from China
suggested a gradual recovery in the world's No. 2 oil consumer.
The HSBC Flash Manufacturing Purchasing Managers Index (PMI)
for China climbed to a three-month high of 49.1 in October and
new orders and output rose.
Miners, however, were the main drag as the
benefits from that China data were countered by
weaker-than-expected German manufacturing PMI and Ifo business
sentiment surveys.
The mining sector is heavily geared to the health of the
global economy through demand for metals, and concern over the
euro zone has been a big factor dragging on recovery
expectations, with weak fundamentals seen exacerbating a debt
crisis in the region.
"The German data has blown a hole in hopes for a bounce
back, with risk-sensitive sectors such as miners taking a knock
as economic recovery hopes get dented," said Mike Mason, senior
trader at Sucden Financial Private Clients.
Banks, which are heavily exposed to the euro
zone through their sovereign debt holdings, were also weak as
the latest data illustrated the weakness of the region.
Part-state-owned lender Royal Bank of Scotland was
the biggest sector faller, down 2.3 percent. Traders said RBS
was also unsettled by news it has agreed to pay $42.5 million in
a settlement with the Nevada attorney general after an
investigation into the bank's mortgage funding practices, the
New York Times said.
Global banking heavyweight HSBC fell 0.3 percent as
the stock traded without entitlement to its latest dividend
payout on Wednesday.
Stocks trading ex-dividend knocked 5.75 points in total off
the FTSE 100 index after the resulting adjustment to prices by
market-makers, with BSkyB, Old Mutual, and
Smiths Group similarly handicapped.
At 0906 GMT, the FTSE 100 index was down 4.58 points, or 0.1
percent, at 5,793.33, having shed 1.4 percent on Tuesday to post
its biggest one-day drop in nearly a month.
"It looks like the bigger correction we were suggesting
(down to 5,500) might have to wait after support kicked in
around 5,790," said Mike van Dulken, Head of Research at Accendo
Markets.
EARNINGS EYED
Concerns over corporate earnings remained an underlying
issue for the market as the third-quarter season continued.
British American Tobacco shed 0.5 percent, after
the world's No. 2 cigarette maker posted a drop-off in
nine-month volumes due to less demand in markets including
Brazil, Japan, Italy, Turkey and Egypt.
"BATS has provided a reminder of an industry which is
increasingly under pressure but which for the moment remains a
defensive play," Said Richard Hunter, Head of Equities at
Hargreaves Lansdown Stockbrokers.
"Long term, this may prove to be an industry in decline. For
the moment, however, the company continues to extract value from
markets wherever it exists," Hunter added.
Imperial Tobacco shrugged aside the disappointing
news from its peer, adding 0.1 percent, buoyed by an upgrade in
rating from Goldman Sachs to neutral from sell on valuation,
according to traders.
(Editing by Stephen Nisbet)
