December 19, 2016 / 10:40 AM / 9 months ago

Britain's FTSE falls as banks, miners slide

(G(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets))

* FTSE 100 down 0.2 pct

* Banks, miners under pressure

* Downgrades hit Ashtead, Carnival

By Kit Rees

LONDON, Dec 19 (Reuters) - Britain’s top share index retreated on Monday, weighed down by a fall among mining companies and banks, while Ashtead Group and Carnival were hit by downgrades from brokers.

The blue chip FTSE 100 index slid 0.2 percent at 6,998.62 points by 1023 GMT, dipping below the psychologically-significant 7,000-point level.

Shares in banking stocks Barclays, Standard Chartered and HSBC were among the top fallers, down between 1.5 percent to 2.1 percent and tracking a broader decline among European banks.

Analysts said that uncertainty among Italian banking shares, in particular regarding a share issue from troubled lender Monte dei Paschi, was dampening the sector.

“We’re still waiting to hear whether Monte dei Paschi will be successful in that last-ditch attempt to raise the money it needs,” Mike van Dulken, head of research at Accendo Markets, said. “Until we get more clarity, the bank sector is going to be a little on edge.”

Shares in mining companies also came under pressure as the price of copper touched a three-and-a-half-week low, with Anglo American and Rio Tinto both down around 1.5 percent.

While shares in British mining stocks have rallied around 96 percent so far this year, analysts at Deutsche Bank highlighted an acceleration or deceleration in Chinese consumption as a key risk for the sector.

“We expect cash to be returned to shareholders, but are concerned ‘house-keeping’ capex could start to creep up and new projects could be approved. We doubt that major M&A will make a comeback, and after the 100 percent rally year to date, we now have little upside to our TPs,” analysts at Deutsche Bank said in a note.

Downgrades also weighed on shares. Cruise operator Carnival dropped 1.9 percent after a downgrade from Berenberg to “hold” from “buy”, citing recent trends in the cost of fuel and a strengthening dollar as headwinds for the stock.

Likewise Ashtead Group slipped 1.6 percent after UBS downgraded the equipment rental firm to a “sell”.

UBS analysts said that pricing pressure was increasing for Ashtead, and that they saw a limited benefit from any increase in U.S. infrastructure spending.

Outside of the blue chips, shares in utility Drax Group rose 3.3 percent after an upgrade from SocGen to “buy” from “hold”. (Reporting by Kit Rees; editing by Mark Heinrich)

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