FTSE steadies in cautious trading ahead of U.S. jobs data

* Market focusing on U.S. non-farm payrolls data

* Tate & Lyle (LSE: TATE.L - news) tumbles 13 pct on profit warning

* Mid-cap Poundland falls after buying 99p Stores

By Atul Prakash

LONDON, Feb 6 (Reuters) - Britain's top share index steadied in morning trading on Friday as investors levelled positions ahead of U.S. non-farm payrolls data due out later in the session.

The blue-chip FTSE 100 index eased 0.04 percent at 6,863.26 points by 0905 GMT paring opening losses.

"Investors are a little nervous ahead of the U.S. jobs report," Brown Shipley senior fund manager John Smith said.

"It is not a time to be taking a lot of risk, particularly given the number of times the FTSE 100 has traded above 6,800, and so far failed to hold above that level for very long."

According to a Reuters survey, non-farm payrolls probably increased by 234,000 last month after a 252,000 rise in December, and the unemployment rate was seen at 5.6 percent. The jobs report is due at 1330 GMT.

Among standout movers, outsourcing company Capita rose 2.4 percent, making it the top FTSE 100 gainer, after it was chosen by Britain's state-funded healthcare service to provide support services.

Barratt Developments (LSE: BDEV.L - news) , Britain's top housebuilder by volume, fell 2.2 percent to be the top FTSE 100 decliner, with traders citing a Liberum note cutting its stance on the stock to "hold" from "buy" as the main reason for the share weakness.

Mid-cap ingredients company Tate & Lyle fell 13 percent after issuing a profit warning.

"Tate shares are being dumped by disappointed investors, with management finding no way of sugar-coating a third profit warning in a year. Today's trading update adds to the company's woes, undershooting expectations," Accendo Markets head of research Mike van Dulken said.

Another mid-cap company, Poundland, Europe's largest single-price discount retailer, fell 8.4 percent after saying it had agreed to buy smaller rival 99p Stores for 55 million pounds. (Editing by Louise Ireland)