FTSE falls on banks and miners

By Dominic Lau

LONDON (Reuters) - The top share index was down 1.3 percent early on Wednesday after gaining for six straight sessions, led by miners and banks, but Marks & Spencer (MKS.L) rose on relief that its poor trading results were not worse.

By 8:39 a.m., the FTSE 100 .FTSE was down 61.46 points at 4,577.46, after rising 10 percent in the previous six sessions. The UK benchmark, however, had fallen more than 31 percent in 2008, its worst annual performance since its launch in 1984.

Miners came under pressure after a recent rally, with BHP Billiton (BLT.L), Kazakhmys (KAZ.L), Eurasian Natural Resources (ENRC.L), Vedanta Resources (VED.L), Antofagasta (ANTO.L) and Xstrata (XTA.L) down between 0.7 and 3.8 percent.

"On the close last night it was the market's best January since 1998, but it is just early days. It probably means it's about to go down," said Darren Winder, equity strategist at Cazenove.

"(The mining sector) is up 20 percent so far this year ... Looks more than a little odd with what's clearly a difficult economic outlook."

Chancellor Alistair Darling said the UK was "far from through" the recession, and that achieving economic recovery was a long way from completion.

The Bank of England began its two-day rate policy meeting on Wednesday and is due to announce its interest rate decision on Thursday. A Reuters poll forecast the central bank would cut rates by 50 basis points to 1.5 percent.

Banks were also big losers, with Barclays (BARC.L), HSBC (HSBA.L), Lloyds TSB (LLOY.L), Standard Chartered (STAN.L), HBOS HBOS.L and Royal Bank of Scotland (RBS.L) down between 1 and 4.7 percent.