Britain's FTSE edges higher with commodity picture mixed

* FTSE 100 up 0.7 pct

* Miners track metals prices higher

* Oil pressured by Iranian output stance

* Old Mutual (Other OTC: ODMTY - news) rises on upgrade

* HSBC downgrades Admiral Group (LSE: ADM.L - news) (Adds quote, detail)

By Kit Rees and Alistair Smout

LONDON, March 14 (Reuters) - British equities edged higher on Monday but underperformed euro zone shares as a fall in the price of oil weighed on energy firms and counteracted a fading boost to UK-listed miners from well-received Chinese data.

Britain's FTSE 100 index rose 40.00 points 0.7 percent to 6,179.79 points by 1510 GMT.

Assurance from a top securities regulator that China will not reintroduce a circuit breaker mechanism to stop volatility on its stock market in the next few years cheered investors, as did the bright spots in generally weaker Chinese data.

These positive signs lent a steadying hand to the price of copper, which stabilised below four-month highs.

Miner and commodities firm Glencore (Xetra: A1JAGV - news) was among top gainers, rising 5.6 percent, although gains in the sector were reduced by the drop in oil prices.

The FTSE 100, which is heavily weighted in oil shares, underperformed continental indexes, and the energy sector trimmed nearly 4 points off the index.

Brent crude dropped nearly 3 percent, below $40 a barrel, after Iran dashed hopes of a coordinated production freeze any time soon.

"Iran remains intransigent on the issue of an oil output freeze... (and) suggestions that oil has found its bottom may have been a bit premature," Connor Campbell, analyst at Spreadex, said in a note.

Shares (Berlin: DI6.BE - news) in South Africa-facing insurance company Old Mutual rose 3.2 percent on a price target upgrade from Barclays (LSE: BARC.L - news) , citing the company's full year results and good operational momentum.

Emerging market-exposed Aberdeen Asset Management (Other OTC: ABDNF - news) also gained, up 7.2 percent, helped by the news from China. However, more domestically exposed financial stocks struggled.

Insurers such as Standard Life (LSE: SL.L - news) and Aviva (Other OTC: AIVAF - news) , financial services group Providential and Barclays (Swiss: BARC.SW - news) were among top FTSE 100 fallers, with traders citing speculation that UK finance minister George Osborne may raise taxes on the insurance and finance sectors in his annual budget on Wednesday.

Car (HKSE: 0699-OL.HK - news) insurance provider Admiral Group fell over 1.9 percent after HSBC cut its rating on the stock to "hold" from "buy" on valuation grounds.

HSBC also downgraded its rating on British mid-cap Stagecoach Group (Other OTC: SAGKF - news) on concerns about weakness in the rail industry. Shares in the public transport company dropped 4.5 percent. (Editing by Jeremy Gaunt)