* FTSE rises 0.3 percent, investors eye U.S. QE decision
* Miners buoyed by China data, metals rise
* Serco falls on press reports, Numis downgrade
By David Brett
LONDON, Nov 1 (Reuters) - Miners led Britain's top shares higher on Monday, boosted by strong data from China, but gains were tempered as investors looked ahead to the outcome of the U.S. Federal Reserve's meeting on Wednesday.
Miners rose after data showing demand in China, the world's biggest consumer of metals, was holding up.
The world's biggest integrated zinc producer Xstrata topped the FTSE leaderboard, up 3.7 percent, supported by strong metal prices as the dollar weakened on the prospect of more quantitive easing from the United States.
The FTSE 100 closed 19.46 points, or 0.3 percent, higher at 5,694.62, having fallen 1.2 percent last week. It earlier touched an intraday high of 5,733.01.
"Today's movements though are indicative of how apprehensive investors are this week as there are so many uncertainties until key economic releases are out and the U.S. mid-term elections are over," Angus Campbell, head of sales at Capital Spreads, said.
"The fact that we retreated from the highs of the morning following the UK data gives further evidence that good news is bad news if it means less QE."
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For a graph on asset performance since the Fed chairman hinted at further QE click: http://r.reuters.com/kyw48p
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COST OF GROWTH
Worries over how much cheap money the Fed might pump into the system to boost growth heightened after some upbeat economic data from the United States, although it was probably too little, too late to stop the Federal Reserve from more monetary easing.
The pace of growth in the U.S. manufacturing sector quickened unexpectedly in October, while U.S. construction spending rose unexpectedly in September as investment in public projects touched the highest level in more than a year.
Earlier, a survey of purchasing managers showed British manufacturing growth accelerated last month, all but ending any hopes that the Bank of England would extend its own QE programme before the end of 2010, traders said.
BANKS RISE
Banks gained with traders citing a note from Macquarie in which the broker repeated "outperform" ratings on HSBC, up 0.9 percent, ahead of a third-quarter trading update on Nov. 5.
Lloyds Banking Group, scheduled to issue a trading update on Tuesday, added 1.0 percent, while Royal Bank of Scotland rose 2.2 percent ahead of its update on Friday.
Technology firm Smiths Group advanced 3.4 percent, making them among the top risers in the FTSE 100, with traders citing a heightened security alert after two bombs were found on U.S.-bound planes.
Serco Group dropped 4.4 percent after weekend newspaper reports about a letter the firm sent to suppliers seeking a 2.5 percent rebate on the 2010 full year spend, with Numis cutting its rating to "reduce" from "hold".
"On a current year price earnings of over 18 times there is no room for errors which tarnish the group's reputation," Numis says in a note.
Weir Group shed 1.4 percent after the engineer issued a trading update.
Retailers Next and Marks & Spencer fell 2.0 and 1.7 percent ahead of results.
(Editing by David Cowell)