Miners help prop up Britain's commodity-heavy FTSE

* Blue (OTC BB: BUES - news) -chip FTSE 100 index steadies

* Miners track strong metals prices

* Anglo American (LSE: AAL.L - news) tops FTSE gainers' list

By Atul Prakash

LONDON, Dec (Shanghai: 600875.SS - news) 18 (Reuters) - Britain's top equity index steadied on Friday, outperforming the broader European stock market and propped up by commodities shares, which advanced as prices of major industrial metals and oil rose.

The commodity-heavy FTSE 100 index was flat in percentage terms at 6,100.11 points by 0918 GMT, after gaining 0.7 percent in the previous session. In contrast, the pan-European FTSEurofirst 300 index was down 0.4 percent.

Equity markets globally retreated after gains on Thursday as investors refocused on underlying weaknesses in the global economy. Most British shares followed suit with the notable exception of the commodity sector.

The UK mining index rose 1.6 percent, the top sectoral gainer, after metals prices gained following a fall in the U.S (Other OTC: UBGXF - news) . currency, making dollar-priced metals cheaper for holders of other currencies.

Anglo American jumped 5.8 percent, the top gainer in the blue-chip FTSE 100 index, while Rio Tinto (LSE: RIO.L - news) , BHP Billiton and Fresnillo (Other OTC: FNLPF - news) were up 1.2 to 2.2 percent.

"A squeeze higher in the mining sector ... is preventing a complete sea of red on the FTSE this morning as we see a mild bounce in copper prices," Brenda Kelly, head analyst at London Capital Group, said.

However, she said the sector's gains on Friday were not likely to be sustainable.

"Recent history would indicate that these large swings in the share prices of commodity producers have been characteristic of a downtrend and attempts to catch the falling knife has not been without casualty," Kelly said.

UBS (NYSEArca: FBGX - news) analysts said that the mining sector's outlook remained challenging, with valuations not compelling and free cashflow remaining negative or struggling to cover dividends.

However, it saw value in some selective stocks. For 2016, it preferred miners with low costs and strong balance sheets, including Rio Tinto and Randgold Resources. Over the next two to three years, it liked companies such as Glencore (Amsterdam: GX8.AS - news) , BHP Billiton (NYSE: BBL - news) and Fresnillo.

Among other sectors, the oil and gas index rose 0.8 percent, supported by a rise in crude oil prices. BP and Royal Dutch Shell (Xetra: R6C1.DE - news) were up 0.9 percent and 1.3 percent respectively. (Reporting by Atul Prakash; Editing by Susan Fenton)