Financials weigh on FTSE but Aveva deal boosts mid caps

* FTSE 100 ends down 0.5 pct, mid caps edge up

* Service PMI fails to move markets

* Aveva surges after Schneider Electric (EUREX: SND1.EX - news) tie-up (Adds details, closing prices)

By Julien Ponthus

LONDON, Sept 5 (Reuters) - Britain's top share index slipped on Tuesday as financials fell amid lingering jitters over the North Korean crisis.

While investors were in no mood for a sell-off, caution was still very much present.

"It is strictly impossible to know what could happen in the next coming hours", Saxo Bank said in a note to its clients, referring to North Korea, whose nuclear test on Sunday triggered international condemnation.

Britain's blue-chip FTSE 100 ended down 0.52 percent at 7,372.92 points, with financials taking most points off the index.

Mid caps however rose 0.15 percent as a tie-up announced between Schneider Electric and Aveva sent shares in the British group up 25.7 percent, their biggest one-day gain in more than two years.

The publication of the IHS Markit (Stuttgart: A1139A - news) /CIPS Purchasing Managers' Index for the British services sector, which fell to 53.2 in August from 53.8 in July and below the median forecast of 53.5 in a Reuters poll of economists, did not alter the mood of investors.

Provident, which plummeted 57 percent this month after a profit warning, was the biggest FTSE loser, down 6.5 percent.

Elsewhere among financials, HSBC, Barclays (Swiss: BARC.SW - news) , Standard Chartered (BSE: 580001.BO - news) and Lloyds all ended in the red with losses of between 0.4 and 1.5 percent.

Shares (Berlin: DI6.BE - news) in precious metals miner Fresnillo (Frankfurt: A0MVZE - news) , which posted the best performance on Monday, surrendered some of its previous gains with a 2.1 percent retreat. Randgold Resources ended up 0.1 percent.

Top FTSE gainers came from different sectors: entertainment group Merlin rose 2.1 percent, followed by bookmaker Paddy Power (EUREX: 27913021.EX - news) and water company Severn Trent (Other OTC: STRNY - news) .

In midcap stocks, housebuilder Redrow (LSE: RDW.L - news) rose 4.4 percent after posting better-than-expected 2016-17 pre-tax profits and saying revenue and profit expectations would continue to rise into 2020.

Halfords rose 2.5 percent after the British bicycle and car part retailer kept its full-year profit guidance as it reported retail like-for-like sales growth of 3.5 percent in the 20 weeks to Aug. 18.

TalkTalk shares were slightly higher, up 0.8 percent, after the Financial Times reported it was exploring an exit from its mobile operations.

888 Holdings fell 3.7 percent, giving up earlier gains. The online betting company swung to a half-year loss because of charges for tax provisions in Germany and a financial penalty imposed by the UK Gambling Commission. (Additional reporting by Danilo Masoni; Editing by Alison Williams)