* FTSE 100 steadies in late trading
* StanChart slumps after update
* Housebuilders down on ratings cut
By Atul Prakash and Kit Rees
LONDON Nov 3 (Reuters) - Britain’s top share index steadied on Tuesday, with energy stocks rallying on strong oil prices and offsetting weaker banks, which were led lower by a slump in Standard Chartered.
Housebuilders were also weaker, with Barratt Developments , Taylor Wimpey and Persimmon down between 2.6 percent and 5.6 percent. That followed a ratings cut from broker Liberum, which said that valuations were too optimistic to withstand future margin pressure.
However, mid-cap Tullow Oil soared nearly 17 percent after its partner in Ghana, Kosmos Energy, said a new project was on track to be completed next year.
Banks were the biggest sectoral decliners, with the UK banking index falling 1 percent, dragged lower by Standard Chartered.
The Asia-focused bank dropped 7.6 percent to 660 pence, the biggest one-day percentage fall in a year, after posting a third-quarter operating loss of $139 million, announcing plans to raise billions of dollars in new capital and scrapping its final dividend for this year.
“The scrapping of the final dividend payment would in itself have been a setback, let alone the overall quarterly loss against expectations of a profit for the period, but these are eclipsed by the announcement of a rights issue which is an admission of the need for assistance,” said Richard Hunter, head of equities at Hargreaves Lansdown.
James Blanchett, senior trader at H2O Markets, said his company remained “short” on the stock, anticipating it could touch its September low of around 612 pence.
Short sellers typically borrow shares to sell, anticipating that the shares will be cheaper by the time they need to buy them back to return to the lender.
“We have got another 4 to 5 percent downside potential before we unwind our short positions and book profits,” Blanchett said.
The blue-chip FTSE 100 index was up 0.1 percent at 6,370.56 points at 1519 GMT.
On the positive side, energy stocks tracked a rise in crude oil prices. The UK Oil and Gas index rose 2.7 percent after oil prices bounced back.
Royal Dutch Shell and BG Group rose 1.0 percent and 2.5 percent respectively after Shell announced plans for further benefits and cost cuts from its planned $70 billion takeover of BG.
Shell has sought to assure investors “that they can make this takeover work ... it seems that investors are taking them at their word for the time being,” said Brenda Kelly, head analyst at London Capital Group. (Additional reporting by Atul Prakash; Editing by Catherine Evans/Ruth Pitchford)