* FTSE 100 down 0.5 pct
* On track to mark gain for Q1 2017
* South Africa-facing stocks fall
By Kit Rees
LONDON, March 31 (Reuters) - Britain's top share index fell on Friday as South Africa-exposed stocks such as Old Mutual dropped, though the FTSE 100 was still on track to mark its fourth quarter of straight gains.
The blue chip FTSE 100 index was down 0.5 percent at 7,331.32 points by 0850 GMT, in line with a broader decline among European indexes.
Shares in South Africa-facing insurer Old Mutual slumped nearly 6 percent after President Jacob Zuma sacked finance minister Pravin Gordhan, sending the rand and government bonds lower.
Other firms with South Africa exposure, such as Mondi and Mediclinic, also fell, while mid cap Investec dropped 8.5 percent.
"They're all exposed to the South African rand, so whenever you have turmoil down there, such as Zuma firing the finance minister, the rand ... weakens," Mike van Dulken, head of research at Accendo Markets, said.
Miners also put pressure on the index, as Anglo American , BHP Billiton and Antofagasta fell between 2.5 percent to 3.4 percent, tracking weaker metals prices lower.
There were more dramatic moves among British mid caps , which overall fell 0.5 percent.
Shares in life sciences and tech investor Allied Mind were down 5.4 percent, hit by a double downgrade from Jefferies which cut the stock to an "underperform" rating from "buy", with analysts saying that writedowns of assets seem more likely than sudden value uplifts.
Among the risers, banking stock Shawbrook rose to its highest level in more than a year, up 9.8 percent after receiving a formal buyout offer for 842.4 million pounds ($1.05 billion) from private equity firms Pollen Street Capital and BC Partners.
Shawbrook has previously rejected the same proposal, then valued at 825 million pounds.
"We still think this represents a huge undervaluation, but given poor performance by management in defence so far, we would expect this to get done," Gary Greenwood, analyst at Shore Capital, said in a note.
Overall, British stocks were set to end March with a slight gain, with the FTSE 100 up 0.9 percent and the mid caps up 0.7 percent.
The FTSE 100 was also on track to mark a 2.6 percent gain for the first quarter of 2017, its fourth quarter of gains in a row as its dollar-earning firms have benefited from a weaker sterling since Britain's vote to leave the European Union in June 2016.
The more domestically exposed mid caps were also on track to post a 4.6 percent gain for the quarter, their third straight quarterly rise. (Reporting by Kit Rees; Editing by Alison Williams)