* FTSE 100 up 0.1 percent
* Tobacco stocks gain, banks weak
* Index down 2.1 percent on month, worst since July
By Simon Falush
LONDON, Nov 30 (Reuters) - Defensive stocks lifted Britain's top share index slightly on Tuesday, as investors remained cautious with euro zone debt problems clouding the horizon.
By 0856 GMT, the FTSE 100 was 6.73 points, or 0.1 percent, higher at 5,557.68 after falling 2.1 percent on Monday. The index is down 2.1 percent so far this month, its worst performance since July.
Defensive tobacco stocks were the biggest support to the index as investors continued to rotate out of areas seen as exposed to an uncertain economic environment. British American Tobacco added 0.7 percent.
The index retreated from open highs as worries that the euro zone's debt problems may spread beyond Ireland to Spain and Portugal kept investors reluctant to take positions in riskier assets, such as equities.
"Sentiment is very fragile and the relief rally is half-hearted as there is concern that the debt problems could move to Spain which is the fourth biggest economy in the euro zone," said Richard Hunter, head of equities at Hargreaves Lansdown.
Banks, seen as among the most vulnerable to continued debt problems, were the biggest weight on the index with Barclays off 0.8 percent.
Engineer Invensys gained 1.3 percent with traders citing ongoing M&A talk after news that Swiss engineering group ABB was to buy U.S. industrial motors firm Baldor Electric Co for $3.1 billion.
WEAK DATA
On the data front, British consumer confidence weakened more than expected in November when people were the most downbeat about the prospects for their personal finances in almost two years, a survey found.
The GfK/NOP consumer confidence barometer fell to -21 in November from -19 in October, below a forecast for a reading of -20 and the weakest reading since July.
Bearish signals on the global economy came out of Asia too.
Factories in Japan and South Korea cut output in October, adding to evidence of an Asia-wide slowdown and boding ill for the rest of the world which has relied on the region to keep the global economy humming.
Later, investors' focus will turn to U.S. house prices, Chicago PMI readings and consumer confidence data, giving an indication of the strength of the recovery in the world's biggest economy.
Technical indicators point to further weakness for the index, analysts said. Bill McNamara, analyst at Charles Stanley said a 38.2 percent Fibonacci retracement of the five-month uptrend at 5,505 will be watched.
"In the event that that level does not hold (and there are good reasons for believing that it might not at this point) we should expect to see a continuation of the sell-off down to 5,381 or so, which would equate to a 50 percent retracement." (Editing by Dan Lalor)