FTSE steadied by miners, though financials falter

By Kit Rees and Sudip Kar-Gupta

LONDON (Reuters) - Britain's top share index steadied on Thursday after a rally in miner Anglo American (AAL.L), although a drop in financial stocks kept the market under pressure.

The blue-chip FTSE 100 index (.FTSE) was flat in percentage terms at 6,322.40 points at its close. The index has been largely flat so far in 2016, but down around 11 percent from a record high reached in April 2015.

The UK mining sector was up 3.4 percent, the top sectoral gainer, led higher by an 8 percent surge in Anglo American.

Investors cheered the miner's move to sell its Brazilian niobium and phosphates businesses for $1.5 billion.

"The disposal will serve to cut debt and bolster the embattled miner’s balance sheet, much to investor glee, leaving it in a much stronger and leaner position both operationally and financially," Mike van Dulken, head of research at Accendo Markets, said in a note.

Financial stocks were the biggest drag on the market, however, knocking around 7 points off the FTSE 100 index, led lower by a 2.9 percent fall at RBS (RBS.L).

RBS said there was a significant risk that the sale of its Williams & Glyn unit might not be achieved by the end of 2017, a condition of its bailout during the financial crisis.

The bank added that "the overall financial impact on RBS is now likely to be significantly greater than previously estimated".

Lloyds (LLOY.L) also fell, down 1.6 percent after posting underlying profits in line with expectations on Thursday.

Some traders expressed disappointment at the bank's unveiling of a 790 million pound charge in this quarter for buying back bonds.

"Overall, Lloyds' results looked in line with forecasts, but there's a slight disappointment at that extra restructuring charge," said Jonathan Roy, advisory investment manager at Charles Hanover Investments.

Stocks going ex-dividend also weighed, with drops in companies including Legal & General (LGEN.L), Informa (INF.L), Merlin (MER.L) and Relx (REL.L) taking around 5 points off the index, as they traded without entitlement to their latest dividend payout.

The FTSE was also hit earlier in the session after global stock markets in general absorbed the Bank of Japan's decision to hold off from expanding monetary stimulus on Thursday.

"Sentiment is very bearish towards the Japanese economy and expectations are mounting that another technical recession could be around the corner," FXTM research analyst Lukman Otunuga said, commenting on Japan.

(Reporting by Sudip Kar-Gupta; Editing by Mark Heinrich)