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* STOXX 600 down 0.3 pct but set for 5 pct quarterly gain
* Old Mutual leads South-Africa exposed stocks lower
* Miners biggest drag to STOXX as copper prices fall
* Upgrades support RWE, Direct Line (Adds details, updates prices)
By Danilo Masoni
MILAN, March 31 (Reuters) - European shares fell slightly on Friday, weighed down by losses among miners and a slump in insurer Old Mutual and other South African-exposed stocks, but were firmly on track to end the quarter with a gain.
The pan-European STOXX 600 index was down 0.3 percent, on track to end the first quarter of this year with a gain of nearly 5 percent, its third straight quarterly gain.
The UK's FTSE 100 fell 0.5 percent, while Germany's DAX was flat and France's CAC down 0.3 percent.
The rally in European shares has been driven by improving economic data, strong earnings and a series of M&A deals in the region, which have more than offset worries over the political future of the region ahead of elections in France and Germany and Britain's divorce from the European Union.
According to the latest weekly data from Bank of America Merrill Lynch, European equities have attracted inflows for $1.5 billion, their largest showing in 60 weeks, as investor concerns over a victory of far-right candidate Marine Le Pen in the upcoming French presidential election subsided.
On Friday, Europe's Basic Resources index, where big miners are listed, fell 1.7 percent, leading sectoral fallers on the continent after copper prices slipped as immediate supply threats eased. Anglo American was the biggest loser on the index, down 3.6 percent.
Old Mutual was the biggest loser on the STOXX, down 7.4 percent, as South Africa's rand and government bonds fell after President Jacob Zuma fired his respected finance minister in a late-night cabinet reshuffle.
Other stocks exposed to the African country were also among the top losers in Europe this morning. Asset manager Investec fell 7 percent, healthcare firm Mediclinic dipped 2.8 percent and paper company Mondi declined 2.4 percent, while German-listed South African retailer Steinhoff fell 4 percent.
"Stocks with exposure to South Africa plunged amid deep fears about the state of the country's government following the sacking of respected finance minister Pravin Gordhan," said ETX Capital analyst Neil Wilson in a note.
Another top loser on the STOXX was Danish biotechnology firm Genmab. Its shares fell after partner Janssen decided not to start the second stage of a study of a key drug.
Among gainers was German utility RWE which rose 2.7 percent after Oddo Seydler upgraded the stock to "buy" from "neutral". UK motor insurer Direct Line rose 3.4 percent, also helped by a broker upgrade.
UK mid cap Shawbrook Group rallied 9.5 percent after the UK lending banks said it had received a buyout offer. (Reporting by Danilo Masoni; Editing by Vin Shahrestani)