UK's FTSE edges up off 5-month lows as tobacco stocks rise

* FTSE rises off intraday low to close flat at 6,710 points

* British American Tobacco rises after broker upgrade

* Greek debt woes, U.S. rate hike prospect dampen sentiment

By Sudip Kar-Gupta

LONDON, June 16 (Reuters) - Britain's main share index bounced up off five-month lows on Tuesday, boosted by firmer tobacco stocks and a broader stabilisation in equity markets which have slumped in recent sessions on fears over Greece.

The blue-chip FTSE 100 index closed at 6,710.10 points - flat in percentage terms but above an intraday low of 6,656.90 points which marked its worst level since late January.

Many investors remained cautious due to a deadlock in Greece's debt talks, but some traders moved in to use the initial market pullback to buy up stocks for relatively low prices.

A stabilisation in European bond markets also lifted stock markets off their earlier lows, while economic stimulus measures from major world central banks have cushioned the blows to European stock markets from the problems in Greece.

"I am probably going to look to buy the dips. Whenever we've seen a sell-off, it's been quickly bought into," said Jeremy Steinson, head of trading at Killik & Co.

British American Tobacco rose 2.9 percent after being upgraded to "buy" from "outperform" by brokerage CLSA.

The gains at British American Tobacco also lifted rival Imperial Tobacco (LSE: IMT.L - news) by 2.2 percent.

However, mining stocks lost ground with copper prices tumbling to three-month lows, partly due to the impact of a stronger U.S. dollar.

The prospect of the U.S. Federal Reserve signalling that its first rate increase in nearly a decade will come in September pushed up the value of the U.S. dollar.

A stronger dollar makes dollar-denominated commodities such as copper more expensive for non-U.S. companies, and can be negative for miners. Higher U.S rates can also boost returns on U.S. Treasuries, increasing their relative appeal over stocks.

Among small caps, APR Energy (Other OTC: APRYF - news) slumped 25.6 percent after warning its 2015 results would be significantly below market expectations.

The FTSE is some 6 percent below a record high of 7,122.74 points reached in late April, while it remains up 2 percent since the start of 2015. (Editing by Ralph Boulton)