Britain's FTSE underperforms, hindered by Glencore

(Refiles to fix typo in paragraph four)

* FTSE 100 down 0.3 pct

* Glencore (Frankfurt: 8GC.F - news) drops after earnings fall

* Rand fall knocks SA-exposed shares

* WPP (Frankfurt: A1J2BZ - news) hits record high after results

By Alistair Smout

LONDON, Aug 24 (Reuters) - Britain's top share index fell on Wednesday, underperforming European peers as it was knocked by a drop in commodity firm Glencore after it reported a fall in earnings and adjusted its debt target.

Glencore fell 4 percent, the top FTSE 100 faller, after it reported a 13 percent decrease in earnings, although it said that it was on track to sell assets and cut debt to a new, lower, target.

Glencore remains up around 100 percent in 2016, and analysts said that, while the results were in many ways encouraging, much of the progress in the restructuring programme was already priced in.

"The markets have, over the course of the year, rewarded the share price for the more pro-active stance Glencore have taken in reorganising their restructuring," said Alastair McCaig, head of investment management at Fern Wealth in Zug, Switzerland.

"We've seen some profit taking as investors recaliberate their timelines. Management still sees issues with demand and volatile markets too. But we would look at this as a potential opportunity to invest in Glencore, should we see a little bit more of a retracement."

Other miners also fell after Glencore's results, with the price of copper also near a six-week low. The sector was down 2.7 percent.

The FTSE 100 was down 0.3 percent at 6,850.40 points, hindered by its heavy exposure to mining stocks. Most European markets were in slightly positive territory.

Stocks with exposure to South Africa, such as Old Mutual (Other OTC: ODMTY - news) and Mondi (Frankfurt: KYC.F - news) also fell, with the rand coming under severe pressure after the South African finance minister was summoned by police.

Among risers, WPP gained 5.6 percent and hit a record high after comfortably beating net sales expectations.

"Advertising is a bellwether for the economy as a whole and WPP's performance in the first seven months has been reasonably strong following a record performance in 2015 and despite worldwide GDP growth slowing," said Russ Mould, investment director at AJ Bell.

Housebuilders rallied for a second day, reaching their highest levels since Britain voted to leave the European Union.

Persimmon (Frankfurt: 882058 - news) again led the sector higher. Having posted strong results on Tuesday, showing resilience to the uncertainty around the referendum, it was up 2.7 percent on Wednesday after a spate of broker upgrades.

"(Persimmon) continues to trade well post-Brexit and at this stage has seen little impact of the referendum risks on underlying demand, supported by strong pent-up demand, tight supply, lower mortgage rates and good mortgage availability," analysts at Citi said in a note, raising their target price on the stock and reiterating a "neutral" stance.

Among mid-caps, OneSavings Bank (Stuttgart: 2OS.SG - news) rose nearly 10 percent after reporting a jump in underlying profit, but remained down 20 percent since the Brexit vote. (Reporting by Alistair Smout; Editing by Toby Chopra)