* FTSE 100 down 0.2 percent; Brent up at over $113
* Rolls-Royce up on Tognum bid plans
* Tullow Oil falls on scant Uganda update
By Tricia Wright
LONDON, March 9 (Reuters) - Britain's top shares edged lower on Wednesday as six stocks went ex-dividend and investors nervously watched oil prices climb on intensified fighting in Libya.
By 1214 GMT, the FTSE 100 was down 13.76 points, or 0.2 percent, at 5,961.00, having eked out a modest gain in the previous session.
Ex-dividend factors accounted for most of the index's decline, with BHP Billiton, British American Tobacco, Hammerson , Serco, Shire and Standard Chartered all losing their payout attractions.
"Traders continue to trade sensitively to any spike in the price of crude oil," Joshua Raymond, market strategist at City Index, said.
"As long as you've got Brent crude above $110 threatening to break out at $120 if anything escalates... in the Middle East outside Libya, then it's going to hamper buying demand in the short term for equities."
Brent crude advanced 51 cents to $113.57 on Wednesday as fighting intensified in Libya, and OPEC said it saw no need to hold an emergency meeting to ease oil supply fears.
Energy stocks bore the brunt of investors' deteriorating appetite for risk, with banks also weighing heavily as fears resurfaced about the euro zone sovereign debt crisis.
The market was digesting the outcome of Portugal's bond auction. Portugal successfully sold two-year bonds on Wednesday, but the cost of borrowing was the most expensive since it joined the euro, keeping alive concerns it will need to request an international bailout.
"Oil is an ongoing theme. Libyan sabre-rattling is keeping investors a little bit on edge," a trader at a London-based brokerage said.
ROLLS-ROYCE BOOSTED
Rolls-Royce gained 2.8 percent after the British aerospace engine manufacturer and German automotive group Daimler said they would bid 3.2 billion euros ($4.44 billion) for industrial diesel engine maker Tognum. "Rolls-Royce is quite wealthy at the moment. We wanted to see an acquisition and this is one that makes sense," Howard Wheeldon, a strategist at BGC Partners, said.
Wheeldon said sentiment surrounding Rolls-Royce was further helped by a contract win, announced on Wednesday, from Cathay Pacific for Trent 700 engines to power 15 Airbus A330 aircraft, and the fact the airline sector is in good health.
This, he said, was amply demonstrated by results from Cathay Pacific Airways, with International Airlines Group among the top blue chip risers, up 2.9 percent, on a positive read-across, according to traders.
Britain's biggest insurer Prudential jumped 4.6 percent after the company's results beat consensus and it said investors would get a payout of 23.85 pence per share, up 20 percent and outstripping the 21 pence expected by analysts.
Share trading volumes were nearly 112 percent of the 90-day daily average by midday.
Tullow Oil was among the biggest blue-chip fallers, off 1.9 percent after the explorer's results lagged forecasts and it gave scant detail on a key Ugandan project. (Editing by Erica Billingham)