* FTSE 100 falls 0.2 percent
* ITV weakens after trading update
* Compass up; hands back a billion to shareholders
* Ex-divs knock up to 15 points off index
By Tricia Wright
LONDON, May 14 (Reuters) - Britain's top shares slipped on Wednesday, led by ITV on a disappointing trading update, but investors were still looking for near-term gains by the FTSE 100 after it hit its highest close this century.
ITV, which had risen 5 percent in the two weeks coming into the update, fell 5.2 percent. Analysts at Citi said its second-quarter guidance for net advertising revenue was just short of their 14 percent forecast. They also said the broadcaster had "some work to do" regaining audience share.
"We believe that underwhelming 2Q NAR (net advertising revenue) guidance, in line 1Q revenue and weak audience metrics could be seen as disappointing today," they said.
The FTSE 100 was down 16.07 points, or 0.2 percent, at 6,857.01 points by 0811 GMT, after closing at its highest in 14 1/2 years on Tuesday - up 0.3 percent at 6,873.08 points.
Traders were looking to see if the index, which has been underpinned in recent weeks by a burst of deal-making and bids alongside signs of a strengthening UK economy, can break above the all-time high of 6,950.60 points it set in December 1999.
"The FTSE remains underpinned by a strong domestic recovery and foreign bid speculation. Technically it also looks healthy," Lex van Dam, a hedge fund manager at Hampstead Capital, said.
Compass was the standout FTSE 100 riser after the caterer said it would return 1 billion pounds ($1.7 billion) to shareholders through a special dividend and raised its interim dividend to 8.8 pence per share.
"(Before) the figures, my view was that to continue the upward momentum in the share price something extremely special would have to be announced ... not only is there a 10 percent increase in the interim dividend but also (the) special dividend," said Jordan Hiscott, senior trader at ayondo markets, who has a six-month target of 1,100 pence for Compass.
The shares, up some 6 percent this year compared with gains of about 2 percent by the UK benchmark index, rose 4.4 percent to 1,024 pence.
Investors in the FTSE 100 should not get too carried away, said Sanlam Securities' head of trading, Mark Ward, although he did expect the index to set a record.
"We are still buyers at these levels, although we are cautious that we will be hitting a ceiling at some point," Ward said. "We think we might see the FTSE as high as 7,000."
That would take the index some 2 percent above current levels.
Stocks trading ex-dividend, including Royal Dutch Shell , Glencore Xstrata and GlaxoSmithKline , knocked up to 15 points off the FTSE 100 on Wednesday.
$1 = 0.5939 British Pounds Additional reporting by Paul Sandle and Sudip Kar-Gupta; Editing by Larry King