Gains in mining stocks led by Mexico-focused precious metals miner Fresnillo were not enough to prevent the blue chip index from tipping into negative territory on Wednesday as losses for shares trading ex-dividend weighed.

At 12.33 p.m. British time, the FTSE 100 index <.FTSE> was down 28 points, or 0.5 percent, dragged down by stocks moving into the ex-dividend period, after which investors will no longer qualify for the latest dividend payout.

There is a slight negative feel to this morning simply because we pushed so high yesterday helped by the ZEW survey and the Spanish bill auctions, said David Morrison, market strategist at GFT Global.

There will be consolidation and I think traders are going to push and pull around this 5,770 level on the FTSE until we really get a lead either from the U.S. or understand what will happen tomorrow with the Spanish bond auction.

Investors are focusing on Madrid's sale on Thursday of 10-year bonds following Spain's return to the forefront of the euro zone sovereign debt crisis as concerns rise about its ability to meet budget deficit targets that have already been eased.

But losses were checked by better performing mining stocks, which led gainers on the FTSE index.

Fresnillo topped the risers list, adding 3 percent as the precious metals miner saw first-quarter gold production come in ahead of its target, and said its silver output was on track.

Global miner BHP Billiton gained 1.6 percent, also after a production report which reassured investors, leading Barclays Capital to repeat its overweight stance on the stock.

But shares in copper miner Kazakhmys bucked the sector trend, falling 2.1 percent as ING downgraded its recommendation to sell from hold on concerns over higher costs, lower volumes and further capex increases.

Kazakhmys also traded ex-dividend on Wednesday, a factor which overall knocked 9.10 points off the broader FTSE index.

Resolution , BAE Systems and Legal & General , led the blue chip fallers list, all also trading ex-dividend on Wednesday.


Shares in Tesco pulled back from a 2 percent jump seen in early trading to settle around 0.2 percent higher as the world's No.3 retailer slashed expansion plans for its main British business.

The retailer said it would spend over 1 billion pounds on improving existing stores as it battles to recover from a shock profit warning late last year.

Tesco shares have fallen 18 percent in 2012, compared with a 3.5 percent gain by the FTSE 100, after its profit warning and a poor performance over the Christmas period.

There is a lot of things listed 'to do' (for Tesco) and doing them will by definition take time, said Shore Capital analyst Clive Black, adding that he thought the group should stop all new store openings in Britain for three years while it sorts out its problems.

Elsewhere, weakness in integrated oils <.FTNMX0530> was the biggest sectoral drag on the blue chips, falling back after gains in the previous session as Brent crude futures eased.

Minutes from the April meeting of the Bank of England's Monetary Policy Committee showing that Britain's high inflation rate may persist into the medium-term were also bearish for the market. The minutes cast doubt on whether the UK central bank will inject more economic stimulus into the economy next month.

Adding to these doubts, Britain's unemployment rate ticked down from a 16-year high in the three months to February, official data showed on Wednesday.

The number of people without a job on the ILO measure fell by 35,000 in the three months to February to 2.650 million, the Office for National Statistics said.

U.S. futures <.SPc1> pointed to a lower open on Wall Street, with investors eyeing another batch of U.S. corporate earnings.

Although we don't have any (U.S.) economic data out today, we do have earnings so we will be watching that and so far there has been a positive reaction, Morrison added.

(Editing by Catherine Evans)