FTSE flat; oils, miners weak; banks, defensives gain

* Oils weak; crude below $67

* Miners slip as metal prices weaken

* Banks, defensives higher

* U.S. markets closed ahead of Independence Day

By Tricia Wright

LONDON, July 3 (Reuters) - Britain's top share index was
flat early on Friday following sharp losses in the previous
session on downbeat U.S. jobs data, with weak oils and miners
offsetting strength in banks and defensives.

By 0945 GMT the FTSE 100 index .FTSE was off 4.60 points,
or 0.1 percent, at 4,229.67 in subdued trading with U.S. markets
closed on Friday for the Independence Day holiday.

The UK blue chip index ended 106.44 points lower on Thursday
at 4,234.27, sliding sharply with Wall Street after the U.S.
jobs report showed non-farm payrolls falling by more than
expected in June.

"It's a very quiet day in terms of corporate announcements
and with the bank holiday on the other side of the pond I think
you could just see us drifting for most of the day," said
Richard Hunter, head of UK equities at Hargreaves Lansdown.

Weak heavyweight miners and oils were the biggest drag on
the blue chips.

Oil majors fell as crude CLc1 steadied below $67 a barrel
after a nearly 4 percent fall on Thursday as the high jobless
numbers across the U.S., and in Europe revived concerns about
the global economic outlook and its impact on energy demand.

BP (BP.L: Quote, Profile, Research), Royal Dutch Shell (RDSa.L: Quote, Profile, Research), BG Group (BG.L: Quote, Profile, Research),
Cairn Energy (CNE.L: Quote, Profile, Research), and Tullow Oil (TLW.L: Quote, Profile, Research) lost 0.1 to 1.4
percent.

Mining shares were broadly lower reflecting falls in metal
prices on demand concerns.

Antofagasta (ANTO.L: Quote, Profile, Research), Anglo American (AAL.L: Quote, Profile, Research), BHP Billiton
(BLT.L: Quote, Profile, Research), Xstrata (XTA.L: Quote, Profile, Research), Vedanta Resources (VED.L: Quote, Profile, Research), and Rio
Tinto (RIO.L: Quote, Profile, Research) lost 1.0 to 2.8 percent.

Underwriters to Rio Tinto's rights issue have sold the
Australian "rump" at A$48.50 each, a 6.3 percent discount to
Rio's last traded price, Rio said in a statement on Friday. Rio
shares added 0.2 percent.

Balfour Beatty (BALF.L: Quote, Profile, Research) was down 2.2 percent after the
infrastructure company's in-line trading update failed to
inspire.

Tesco (TSCO.L: Quote, Profile, Research) slipped 0.3 percent. The largest retailer in
Britain is set to face strong opposition to its planned share
option scheme changes at its annual general meeting on Friday,
the Financial Times said.

BANKS REBOUND

Banks added the most points to the blue chip index,
rebounding after falls on Thursday.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research) gained 1.1 percent, with
Barclays (BARC.L: Quote, Profile, Research), HSBC (HSBA.L: Quote, Profile, Research) and Lloyds Banking Group
(LLOY.L: Quote, Profile, Research) rising 0.8-1.2 percent

Defensive issues found support as investors' risk appetite
faded following the U.S. jobs disappointment, with tobacco and
drug issues moving higher.

GlaxoSmithKline (GSK.L: Quote, Profile, Research), AstraZeneca (AZN.L: Quote, Profile, Research), and Shire
(SHP.L: Quote, Profile, Research) took on 0.2 to 0.7 percent, while British American
Tobacco (BATS.L: Quote, Profile, Research) and Imperial Tobacco (IMT.L: Quote, Profile, Research) added 0.8 and 0.3
percent, respectively.

Associated British Foods (ABF.L: Quote, Profile, Research), up 0.4 percent, was given
a lift as Citigroup hiked its target price to 790 pence a share
from 715 pence ahead of the company's third-quarter trading
update, scheduled for release on July 9.

And British Airways (BAY.L: Quote, Profile, Research) added 1.2 percent ahead of the
airline's June passenger traffic numbers, due at 1315 GMT.

There was little market reaction to data showing a slowing
in the recovery in the British service sector in June, with the
CIPS/Markit UK services PMI activity index reading of 51.6 below
May's 51.7 reading and the forecast of 52.0.
(Editing by Greg Mahlich)