* Bid for Severn fuels M&A speculation in utilities
* Strikes hurt miners
By Toni Vorobyova
LONDON, May 14 (Reuters) - Britain's top share index held near 5-1/2 year highs on Tuesday, with a broad selloff in miners offset by takeover talk in the utility sector after a bid for Severn Trent (LSE: SVT.L - news) .
Shares in Severn Trent jumped 14.4 percent after the water company reported a takeover approach from a consortium led by Canada's Borealis and the Kuwait Investment Authority.
The news also boosted rival United Utilities (LSE: UU.L - news) , with traders betting on more deals in the sector. As corporate confidence recovers, investors are generally looking for merger activity to become a market driver.
Britain's utilities sector is the most expensive in Europe, trading at 15.3 times expected earnings for this year, according to Thomson Reuters StarMine. But it also enjoying forecast upgrades, the lowest debt to equity ratio and the highest returns on equity.
However, with utilities accounting for less than 4 percent of the FTSE 100, the broader index was pegged back by weakness in miners, which weigh in at nearly 10 percent.
The British blue chip index was down 9.49 points or 0.1 percent at 6,622.48 points by 1028 GMT, just off a fresh 5-1/2 year peak of 6,649.34 points.
"The market is really taking a break at the moment ... These pullbacks are quite a good opportunity to buy," said Jonathan Roy, dealer at London Stone Securities, which has raised its target for the FTSE 100 to 6,750 points after its previous 6,600 goal was surpassed.
Miners' problems range from falling copper and gold prices to strikes and mine closures.
A wildcat strike halted work at South African mid-cap platinum miner Lonmin (LSE: LMI.L - news) 's operations, and triggered falls in South African-focused blue chip peers Anglo American (LSE: AAL.L - news) and Randgold Resources.
"(This) could be the start of something significant given the backdrop of redundancies and wage negotiations. Stay short Lonmin and platinum equities in general," analysts at Liberum Capital (OTC BB: CGHC - news) said in a note. (Editing by Ruth Pitchford)