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Britain's FTSE falters as mining stocks lose ground

Mon, 10th Aug 2015 11:29

* FTSE 100 down 0.7 pct

* Miners impacted by Investec downgrade on sector

* esure falls sharply after results miss consensus (Adds detail, quotes)

By Alistair Smout and Liisa Tuhkanen

LONDON, Aug 10 (Reuters) - Britain's top share index slippedlower on Monday, weighed down by a drop in major mining stockswhich were impacted by a broker's downgrade on the sector afteranother batch of weak data from China.

The blue-chip FTSE 100 index fell 0.7 percent to6,668.45 points in by 1105 GMT. The FTSE is up around 1.5percent since the start of 2015 but is some 6 percent below anApril record high of 7,122.74 points.

The market fell in thin trade, with Eikon data showing itwas set to be the quietest day of the month at midsession.

Miners, which account for around a tenth of the FTSE 100 interms of market capitalisation, dominated the index's list ofworst-performing stocks, with Anglo American falling 2percent while BHP Billiton declined 1.8 percent.

Broker Investec downgraded several stocks in the sector andcut its commodity price forecast due to weakness in demand fromChina, the world's biggest metals consumer.

A survey showed a contraction in activity in China'sfactories, sending copper to a six-year low even as China'sequity rallied on hopes of stimulus.

Jeremy Batstone-Carr, market analyst at Charles Stanley,said that the weak data may result in China devaluing itscurrency.

"The commodity heavy UK market is taking a bit of abattering. The pressure is rising on China to devalue itscurrency ... which would support China's equity but not helpmetal prices or UK-listed miners," he said.

Shares in Dixons Carphone also fell 0.8 percent afterthe electrical goods and mobile phone retailer said the personaldata of up to 2.4 million of its customers may have been exposedin a cyber attack.

Among mid caps, insurance company esure dropped10.7 percent after its interim results marginally missedanalysts' consensus forecast, hit by weakness in its motorinsurance business.

"The company posted a massive 81 percent drop in tradingprofit from its motor insurance arm, decidedly offsetting a risein premiums in other areas of the business," Augustin Eden,analyst at Accendo Markets, said in a note. (Editing by Digby Lidstone)

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