* FTSE 100 gains 0.04 pct after Wednesday's drop
* Miners in demand as copper rises on stimulus hopes
* Banks weak; RBS falls on latest Libor scandal twist
LONDON Aug 23 (Reuters) - Britain's top share index inched
higher on Thursday, steadying after sharp falls in the previous
session, underpinned by a recovery among heavyweight miners on
expectations of fresh global stimulus measures from central
banks.
Mining stocks tracked firmer copper prices
, which were up over 1 percent at a one-month high as the
demand picture for metals improved on the stimulus hopes.
Speculation of further monetary action from top metals
consumer China was heightened after the country's manufacturing
sector PMI data came in at the lowest level since last November.
Investors also saw the minutes from the July 31-Aug 1 U.S.
Federal Reserve policy meeting, published after the London close
on Wednesday, as suggesting the Fed is likely to launch a third
quantitative easing programme fairly soon.
"The dovish Fed comments really surprised. Especially the
hints that the next lot of QE could be unlimited. If the central
bank sets a number on likely QE amounts the market tends to
price it all in and then gets disappointed when it happens,"
said Graham Bishop, equity strategist at Exane BNP Paribas.
"If it sets no figure, the market can't do that, and the Fed
has the firepower to make that happen," Bishop added.
At the close, the FTSE 100 was up 2.40 points, or
0.04 percent, at 5,776.60 after a topsy-turvy session which saw
the index hit a peak at 5,809.26 before dropping back to a low
of 5,764.02, with movements exaggerated by thin volumes.
The FTSE 100 index's trading volume on Thursday was 65
percent of the 90-day daily average.
West Africa-focused gold producer Randgold Resources
was the top FTSE 100 riser, up 4.2 percent, buoyed by both
higher gold prices and steps towards political stability in
Mali, where the company's flagship mine is located.
Randgold welcomed a new interim government in Mali, a move
which takes the country closer to constitutional order after a
military coup in March.
EARNINGS FOCUS
Strength in the miners came in spite of further weak sector
earnings reports, with blue chip Kazakhmys and mid cap
Petropavlovsk both reporting steep falls in profits.
Kazakhmys was the top FTSE 100 faller, down 3.4 percent,
while Petropavlovsk was the top FTSE 250 faller,
dropping 16 percent, with the mid cap index off 0.2 percent.
Some 88 percent of miners have missed second-quarter
expectations with earnings contracting 47 percent year-on-year,
according to Thomson Reuters Starmine data.
Among other earnings news, IMI shed 2.6 percent
after the engineer warned the pace of growth was likely to slow
in the second half on weakening economic conditions in Europe,
taking the gloss off a 4 percent rise in profit.
However, solid earnings saw Diageo add 1 percent, as
the spirits group posted a 13 percent rise in full-year profit,
putting it on track for its medium-term targets.
"Excellent set of numbers with solid increases in organic
growth metrics. There was some concern ... of a slowdown in
these numbers but they have beaten expectations," said Atif
Latif, Director of Trading Equities & Derivatives at Guardian
Stockbrokers.
BANKS A DRAG
Weakness in banks was the biggest drag on blue
chip sentiment, with partly state-owned lender Royal Bank of
Scotland a big FTSE 100 faller, down 3.3 percent.
A former dealer for RBS has provided fresh details on how
traders at the British bank tried to influence Libor rates,
court documents filed in Singapore showed.
More than a dozen banks are currently under investigation by
regulators in the United States, Europe and Asia for suspected
rigging of the London interbank offered rate (Libor).
Real estate stocks also featured among the main blue chip
fallers, with fears that tenants are deferring investment
decisions as the Eurozone crisis drags on, leading Jeffries
International to downgrade its sector recommendation to
"neutral" from "overweight", also citing valuation grounds.
Jeffries cut its ratings for blue chips British Land
, Hammerson and Land Securities, all
to "hold", and the three issues lost 1.1 percent to 2.1 percent.
(Editing by Hugh Lawson)
