Mining stocks get Fed minutes lift to support FTSE 100

* U.S. Fed minutes boost commodity prices and stocks

* Mining stocks outperform as FTSE turns flat

* FTSE still down 3.7 pct since start of 2014

* Nomura downgrade depresses Vodafone (Adds detail, quote, updates prices)

By Alistair Smout

LONDON, Oct 9 (Reuters) - Britain's top equity index was boosted by the mining sector on Thursday after minutes from a Federal Reserve meeting suggested the United States might keep interest rates lower for longer than expected, lifting metals prices.

However, strong gains for the broader market were shortlived, with investors still concerned about conflict in the Middle East and the euro zone's economy, which have pegged back markets in recent weeks.

The blue-chip FTSE 100 index, which had fallen to near 8-month lows at the start of October, rose as much as 0.8 percent, before turning flat at midday, trading at 6,475.42 points by 1120 GMT.

The FTSE 350 Mining Index, which has fallen nearly 6 percent this year on worries over lower iron prices and a possible Chinese economic slowdown, outperformed to rise 2.6 percent as metal prices rose in light of the Fed's minutes.

The Fed's Sept. 16-17 meeting showed concerns from the U.S. central bank that the rising dollar could slow a needed rebound in inflation, signalling it will keep rates low and pursue accommodative policy for longer.

Leading the miners higher were precious metals specialists. Randgold Resources and Fresnillo (Other OTC: FNLPF - news) both rose more than seven percent.

Traders said the Fed's concern over a strong dollar could also boost appetite for other "safe-haven" assets, such as gold.

Gold mining group Randgold also benefitted from an upgrade by Numis Securities to "buy" from "add".

"U.S. dollar strength has pummelled all the commodities. People who have confidence in gold have come in looking for bargains, and the Fed minutes have really helped the cause," CMC Markets market analyst, Jasper Lawler, said.

He said that concerns over the German economy, which saw exports plunge on Thursday, as well as fighting in the Middle East, made gains hard to sustain.

The FTSE 100 remains some 5.9 percent below a 2014 peak of 6,904.28 points reached in early September, and is down 3.7 percent since the start of 2014.

Hantec Markets analyst Richard Perry said that while the FTSE could hit 6,700-6,800 by the end of 2014, uncertainty over political fallout from sectarian wars in the Middle East could prevent the FTSE from returning to the 6,900 point level.

"The Fed minutes are definitely boosting equities today, but I think there's too much geopolitical tension going on to allow the FTSE to return to its previous highs," he said.

Among the top fallers, mobile telecommunications group Vodafone fell 2 percent after investment bank Nomura cut its rating on to "reduce" from "neutral", arguing Vodafone could be affected by greater competition within its sector. (Additional reporting by Sudip Kar-Gupta, Liisa Tuhkanen and Alasdair Pal in London; Editing by Louise Ireland)