* FTSE 100 index down 0.2 percent
* Miners weak as metals prices slip on dollar gains
* Smith & Nephew, Burberry rise on bid talk
By Jon Hopkins
LONDON, Dec 8 (Reuters) - Weakness in heavyweight miners dragged Britain's leading share index lower on Wednesday, although firmer banks, energy issues and some takeover speculation helped limit the falls.
At the close, the FTSE 100 was down 13.92 points or 0.2 percent at 5,794.53, having hit a three-week high on Tuesday.
"It has been a choppy trading session today with a lack of significant economic data giving the market very few ... drivers," said Giles Watts, head of equities at City Index. "As a result, traders have been largely going through the motions with the markets drifting sideways."
Miners fell back as metal prices eased on the back of a stronger dollar, after U.S. Treasury yields surged on a proposed extension in U.S. tax cuts, and as concerns over potential rate hikes in China weighed on sentiment.
Silver miner Fresnillo and gold miner Randgold Resources were among the worst off, down 4.9 and 3.5 percent respectively.
Capital Shopping Centres was the biggest FTSE 100 faller, shedding 5.4 percent after shareholder Simon Property said it might sell its 5 percent stake in protest over CSC's 1.6 billion pound ($2.5 billion) plan to buy a UK mall, which it sees as value destructive.
Ex-dividend factors weighed on Associated British Foods and Investec, while 3i Group and Vedanta Resources also lost their payout attractions.
IN DEMAND
Most banks managed to rally on relief at a lack of fresh concerns about European sovereign debt, although global bank HSBC fell 1 percent, weighing the sector down.
Part-nationalised Lloyds Bank gained 1.4 percent, while Standard Chartered added 2 percent ahead of a trading update due on Thursday.
Insurers were also in demand, led by Prudential, up 3.7 percent, with UBS adding the firm to its "Key Calls" list and raising its price target, citing growth prospects in Asia.
Integrated oils were buoyed by gains in BP, up 0.4 percent, helped by a bullish note from Morgan Stanley.
A smattering of takeover speculation also helped out.
Smith & Nephew was the top blue chip riser, up 9.1 percent. The Daily Mail's market report noted talk of a 7.1 billion pound, or 8 pounds-a-share cash offer from a U.S. private equity consortium for the medical products firm.
Burberry climbed 2.3 percent as traders cited rumours of bid interest. And security services group G4S added 4.8 percent as traders pointed to the clearance of a big stock overhang and European sector consolidation hopes.
U.S. blue chips were down 0.2 percent by London's close, weighed by gains in the dollar and higher bond yields.
The FTSE 100 index is seen gaining more than 8 percent by the end of 2011, with equity investors shrugging off economic gloom, a Reuters Poll found. (Editing by David Holmes) ($1=.7566 Euro)