Britain's FTSE steadies, underpinned by commodities

* Market supported by gains in oil and industrial metals

* Sainsbury (Amsterdam: SJ6.AS - news) 's sees choppy trade after update

* British industrial output grows (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

By Atul Prakash

LONDON, June 8 (Reuters) - Britain's top share index outperformed European shares on Wednesday, with a recovery in commodities prices underpinning basic resources and energy stocks.

The blue-chip FTSE 100 index was flat in percentage terms at 6,285.21 points by 1135 GMT after gaining in the previous three sessions.

The index outperformed a 0.4 percent fall on the euro zone blue-chip Euro STOXX 50.

The UK mining index rose 1.8 percent, the top sectoral gainer, after copper prices climbed higher on a weaker dollar and after top metals consumer China reported strong copper imports in May.

"Copper is a leading indicator for the industrial sector. From the data, we see demand is picking up in China and this translates into a more positive outlook for the commodity," said Naeem Aslam, chief market analyst at TF Global Markets.

"However, we need to see more positive numbers from China before investors can start supporting this uptrend."

Prices of other industrial metals such as aluminium and nickel also advanced, helping Glencore (Xetra: A1JAGV - news) , Anglo American (LSE: AAL.L - news) and Antofagasta (Other OTC: ANFGF - news) to gain between 2 percent and 3 percent.

The energy index also gained 1.8 percent after oil prices rose for a third day to hit their highest in about eight months, boosted by industry data showing a larger than expected drawdown in U.S (Other OTC: UBGXF - news) . inventories, worries about attacks on Nigeria's oil industry and strong Chinese demand for crude.

Among individual stocks, Sainsbury's showed choppy moves after Britain's second-biggest supermarket chain reported a drop in quarterly underlying sales and cautioned that it did not expect market conditions to improve any time soon.

Its shares did come in slightly better than analysts' average forecast, and after giving up an early gain to turn negative, it was last back up by 1.5 percent.

However, many remained sceptical of the outlook for the grocer as it said it was prepared for an escalation of a recent price-war with low cost retailers.

"Things are still tough on the high street. Food price deflation is still depressing grocery sales and the discounters Aldi and Lidl are still nibbling at the big supermarkets' heels," said Hargreaves Lansdown (LSE: HL.L - news) analyst Laith Khalaf.

"Nothing will move the dial at Sainsbury more than the planned acquisition of Home Retail Group, the parent company of Argos ... But like Sainsbury, Argos has its own problems and the outcome of two challenged businesses joining forces still remains very uncertain."

The broader stock market was also underpinned by data showing British industrial output grew at its fastest for nearly four years in April, boosted by pharmaceuticals, car production and gas.

The data contrasted with other signs of a slowdown in the economy ahead of Britain's referendum on June 23 on whether to remain in the European Union or to leave.

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Additional reporting by Alistair Smout; Editing by Gareth Jones)