Britain's FTSE slips, though on track for fifth straight month of gains

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* FTSE 100 down 0.4 pct

* Set for fifth month of straight gains

* WPP (Frankfurt: A1J2BZ - news) jumps after update

By Kit Rees

LONDON, Oct (HKSE: 3366-OL.HK - news) 31 (Reuters) - British shares retreated on Monday but remained headed for their fifth straight month of gains, as advertising group WPP gained after reporting its third-quarter results.

The blue chip FTSE 100 index was down 0.4 percent at 6,967.14 points by 0956 GMT, in line with the broader European market.

Shares (Berlin: DI6.BE - news) in WPP rose 3.2 percent, leaving them on track for their biggest daily gain in four months. WPP, the world's largest advertising group, reported results in line with expectations {nL8N1D11Q2].

"We are encouraged by the positive nature of this morning's update and remain fundamentally positive on WPP's ability to capitalise on a solid medium-term outlook for global advertising spend," Roddy Davidson, an analyst at Shore Capital Markets, said in a note.

The sell-off, however, was broad-based, with retailer Next (Frankfurt: 779551 - news) , , building materials supplier Travis Perkins (Frankfurt: 893509 - news) and Marks and Spencer among the biggest losses. All were down more than 2 percent.

The FTSE 100 index was set to mark its fifth month of gains in a row, helped by a rally in banks and mining companies. Banks were boosted by last week's well-received earnings from Barclays (Swiss: BARC.SW - news) and Lloyds, with the FTSE 350 banking sector hitting its highest level for the year.

October saw the FTSE 100 set a record high of 7,129.83 points. A weaker pound has bolstered the index, which has rallied about 10 percent since the Britain voted to leave the European Union in June. The cheaper pound helps the index's international, dollar-earning firms.

Some analysts, however, were more cautious on the outlook for British shares.

"(The FTSE) is still continuing the positive run of gains since Brexit, so it's a Brexit bounce, but it's run into that previous record high ... and pulled back quite significantly from there," said Jasper Lawler, market analyst at CMC Markets (LSE: CMCX.L - news) .

Investors were holding back before upcoming central bank interest rate decisions and the U.S. presidential election, Lawler added.

"I think no one's really got the confidence to buy the market up through into new record highs."

The more domestically exposed FTSE 250 index was set to end the month with a slight loss, down 2 percent for October. It has been weighed down by a spate of profit warnings and large declines from companies including Berendsen (LSE: BRSN.L - news) , Cobham (Amsterdam: CH6.AS - news) , Senior (Other OTC: SNIRF - news) and Keller. (Editing by Larry King)