Britain's FTSE steadies, Johnson Matthey gains on solid earnings

* FTSE 100 flat, trading volumes light

* Johnson Matthey (LSE: JMAT.L - news) up after results

* Miners hit by weak Chinese data

By Tricia Wright

LONDON, Nov 21 (Reuters) - Britain's top shares steadied on Thursday after their recent losses, as solid earnings from the likes of Johnson Matthey and robust U.S. economic data offset concerns over the outlook for U.S. monetary policy.

However, some traders felt there was scope for further falls in the market, which has been trending lower since late October.

The FTSE 100 ended up a quarter of a point at 6,681.33, having recovered from a session low of 6,643.47 and after losing ground in the previous two days. Volumes were light, at three quarters of the 90-day daily average.

The index is trading some 2 percent below a five-month high of 6,819 hit on Oct (KOSDAQ: 039200.KQ - news) . 30, shaving its advance in 2013 to around 13 percent.

"I think we are still in a sell-off," Mike van Dulken, head of research at Accendo Markets, said.

"The tick back up ... from the lows is nice to see but you've still got big resistance at 6,710."

He said that, should support at 6,640 give way, the index could fall as far as mid-November lows of around 6,610.

Johnson Matthey, the world's largest maker of catalysts to control car emissions, topped the FTSE 100 leader board, up 3.7 percent, after unveiling a 13 percent rise in first-half profit, helped by increased global production of cars and trucks.

"A strong set of numbers ... The outlook remains slightly cautious but notwithstanding any more negative news in this space, we expect to see some more earnings upgrades through the next couple of years," said Atif Latif, director at Guardian Stockbrokers.

AstraZeneca (NYSE: AZN - news) also notched up solid gains, ahead 2.8 percent, as Citi analyst Andrew Baum and colleagues highlighted the early-stage potential of its cancer drug pipeline in a research note, adding it might make sense for the drugmaker to acquire Actelion (Xetra: ACT.DE - news) .

Sentiment on Thursday was helped by data releases from the United States indicating stronger labour market conditions and subdued inflation pressures.

But the market's progress was limited by minutes of the U.S. Federal Reserve's Oct. 29-30 meeting showing bank officials felt they could start scaling back the asset purchase programme at one of its next few meetings if economic conditions warranted it.

The stimulus has proved a major driver for the UK benchmark index, which has risen around 20 percent in the past year as investors have moved out of safe bonds and into higher-yielding assets, such as stocks.

Some traders reckon this has left valuations looking stretched, with the FTSE 100 trading at a 12-month forward price/earnings ratio of 12.7 times, above its 10-year average of 12 times, according to Thomson Reuters Datastream.

"Although the markets knew (stimulus withdrawal) was coming, and to an extent has been priced in for a while now, I believe there is scope for a sell-off as some traders look to close positions and lock in profits," Sanlam Securities' head of trading Mark Ward said.

News (Other OTC: NWSAL - news) of slowing factory growth in top metals consumer China also capped Britain's miners-heavy exchange.

Antofagasta (Other OTC: ANFGF - news) , off 1.2 percent, was downgraded by UBS on Thursday, to "neutral" from "buy", with the investment bank citing concern over the outlook for copper.