Shares, pound fall after S&P comments on banks

LONDON (Reuters) - Britain's shares, sterling and gilt futures fell on Thursday after credit ratings agency Standard & Poor's said the UK banking system was no longer among the most stable and low-risk.

By 3:14 p.m., the FTSE 100 index .FTSE was down 0.4 percent at 5,195.49 points, with UK bank shares paring gains.

Benchmark UK gilt futures briefly fell after S&P's comments. By 3:15 p.m., the March contract was down 33 ticks at 115.62.

Sterling tumbled nearly a U.S. cent to around $1.6150 from $1.6236 previously, erasing the day's gains. The euro pared losses against the pound, rising from a session low of 86.03 pence to around 86.38 pence.

"The (UK) bank news has made matters worse, the Greek thing is knocking around, the news out there is not good, it's very nervy at the moment," said Nick Serff, strategist at City Index.

(Reporting by London markets team)