ftse cautiously higher

LONDON, Sept 5 (Reuters) - Britain's top share index was up
for the sixth day on Wednesday, but gains were tempered by a
decline in bank stocks as investors remained cautious ahead of
key U.S. employment data later in the week.

At 0843 GMT, the FTSE 100 <.FTSE> was up 0.2 percent at
6,390.5 in choppy trade, having closed 1 percent higher in the
previous session.

The August U.S. non-farm payrolls report is due on Friday,
but ahead of that the ADP employment report, a gauge of U.S.
private sector employment, is due at 1215 GMT.

Investors are keen to see whether the credit troubles that
have shaken financial markets have spread to other parts of the
world's largest economy.

Legal & General , Segro and Alliance &
Leicester were among the biggest losers of the day,
trading ex-dividend this session. Companies going ex-dividend
are expected to take about 1.1 points off the index.

Analysts said the ongoing shortage of liquidity and high
short-term borrowing rates would keep markets volatile.

"There is a growing recognition that those liquidity issues
aren't going to disappear quickly, and those same liquidity
issues are going to start to have a ripple effect into the
mortgage market, in terms of refinancing fixed-rate products,"
said Darren Winder, equities strategist at Cazenove.

"None of the data really points to any softening in the
recent past, but there is this sort of payment shock coming in
the UK consumer's way, and I think there's a great deal of
uncertainty about how these liquidity issues will be resolved."

Investors were also awaiting the release of the Federal
Reserve's Beige Book, which offers anecdotal evidence of current
economic conditions in each of the central bank's 12 districts
after the European market close.

Financial shares in London were also under pressure after a
decline in property and banking stocks hit Japan's Nikkei
<.N225>.

Northern Rock struggled with losses of 1.2 percent
after Lehman Brothers cut the stock to "underweight" from
"equalweight".

HSBC and Barclays fell 0.4 percent, while
Royal Bank of Scotland dropped 0.5 percent.



MINERS UP

India-focused miner Vedanta hit a record high, with
traders saying Merrill Lynch had added it to its "Europe 1"
list. Merrill was not immediately available for comment.

Vedanta rose nearly 5 percent, Lonmin gained 3.7
percent, and Antofagasta firmed 1.5 percent.

Among other gainers, Land Securities rose 0.2
percent as a newspaper reported its chairman, Paul Myners,
ordered the property firm to examine a possible break-up.

Rival British Land was up 0.5 percent.

Oil stocks rose as crude futures prices held near $75 a
barrel, while the sector also benefited from positive research.

Heavyweight BP gained 1.3 percent, and BG Group
rose 1.5 percent after brokerage Sanford C. Bernstein
upgraded both stocks to "outperform". Royal Dutch Shell
was up 0.6 percent.