Britain's FTSE posts worst weekly performance since January as U.S. healthcare vote looms

* FTSE 100 down 0.1 pct

* Oil stocks weigh

* Smiths Group (Frankfurt: QS2A.F - news) jumps after results (Recasts, updates prices)

By Kit Rees and Helen Reid

LONDON, March 24 (Reuters) - Britain's top share index dipped on Friday ahead of a delayed U.S. vote on a key healthcare bill, though gains among Smiths Group and Provident Financial (Other OTC: FPLPF - news) capped losses.

The FTSE 100 closed 0.1 percent lower. It had its worst weekly decline in two months, down 1.2 percent on the week. Global equity markets turned down on Tuesday as investors grew concerned about the 'Trump trade', which had been buoying stocks.

The healthcare vote has been seen by financial markets as a test of President Donald Trump's ability to work with Congress to deliver on his other priorities such as tax cuts and infrastructure spending, the promise of which have boosted shares since his election.

Engineering firm Smiths Group was the top gainer, rising 3.3 percent and hitting a record high after posting higher first-half profit and maintaining its full-year outlook.

"Profits are almost 12 percent above our forecast (helped by R&D capitalisation) and guidance remains for a stronger 2H17. It is still arguably early days," Sandy Morris, equity analyst at Jefferies, said.

Shares (Berlin: DI6.BE - news) in Provident Financial were also among top gainers, up almost 2 percent after RBC raised its rating on the stock to "outperform" from "sector perform", citing the likelihood of consensus upgrades on expected increases in forward forecasts as well as "sector-leading" capital returns.

Retailers Next and M&S, top gainers in the previous session, were down 1.6 percent. UBS (LSE: 0QNR.L - news) cut its target price on Next (Frankfurt: 779551 - news) , saying it expected the retailer's underperformance to continue in the first quarter.

Overall gains were muted among blue chips as caution set in ahead of the vote on Trump's healthcare bill.

Trump and his fellow Republicans have pledged to scrap Obamacare, but have failed to close the deal on time for the planned Thursday vote.

"This is the first real hurdle (Trump) faces, and any resistance could suggest that (he) would face similar resistance to other policies down the road," Mike van Dulken, head of research at Accendo Markets, said.

"The current rally has gone so far on promises, the markets are starting to ask for a lot more proof."

So far the FTSE 100 has gained more than 7 percent since Trump won the U.S. presidential election, with stocks driven by a global reflation trade on hopes of increased fiscal spending and tax reforms.

Oil stocks were the biggest weights among the large caps, with BP and Royal Dutch Shell (LSE: 0LN9.L - news) down 0.7 percent and 0.3 percent respectively. (Reporting by Kit Rees; Editing by Gareth Jones)