* Miners fall on monetary policy tightening fears
* UK banks mixed; U.S. banking bill awaited
* Defensive gains; BT Group up on Citigroup upgrade
By David Brett
LONDON, March 15 (Reuters) - Britain's top share index was
down 0.1 percent around midday on Monday, with miners weaker as
China monetary policy concerns weighed on metals prices,
outpacing defensive stock gains on waning investor risk
appetite.
By 1156 GMT the FTSE 100 <> index was 5.42 down points
at 5,620.23, having added just 0.5 percent last week.
Miners, which have been at the forefront of the recent
market recovery, sustained the biggest losses on the index,
weighed by lower metal prices as investors worried about Chinese
inflation.
Eurasian Natural Resources <ENRC.L>, Vedanta Resources
<VED.L>, Antofagasta <ANTO.L>, Kazakhmys <KAZ.L>, Rio Tinto
<RIO.L> and Anglo American <AAL.L> fell 1 to 2 percent.
Banks were mixed ahead of the new banking regulation bill
set to be unveiled in the United States on Tuesday, and with
some negative broker comment.
Lloyds Banking Group <LLOY.L> and Barclays <BARC.L> each
dropped 0.8 percent as Seymour Pierce initiated coverage on
three UK banks with "sell" ratings. But Royal Bank of Scotland
<RBS.L> gained 3 percent
In choppy trade, HSBC <HSBA.L> and Standard Chartered were
0.1 and 0.2 firmer, respectively.
"Fears over an impending interest rate rise in China and
with details set to emerge on reform of financial regulation in
the US, investors have looked to sell out of part of their
holdings," said Joshua Raymond, market strategist at City Index.
BAE Systems <BAES.L> shed 0.6 percent. The company is to put
forward a job creation package in a last-ditch attempt to secure
a 4-billion-pound contract to build armoured reconnaissance
vehicles for the British army, local media said on Sunday.
BSkyB <BSY.L> lost 1.3 percent as Evolution Securities cut
its rating on the stock to "reduce" from "neutral" on valuation
grounds.
The satellite broadcaster's shares rose 5 percent on Friday
after traders cited talk that Rupert Murdoch may take the firm
private.
British Airways <BAY.L> is 1.3 percent lower with a planned
seven-day strike by cabin crew hanging over the shares. British
Prime Minister Gordon Brown called the strike "unjustified and
deplorable" on Monday, and said it should be called off.
[]
Chipmaker Arm <ARM.L> and midcap peer CSR <CSR.L> dropped
1.3 and 2.4 percent, respectively, as UBS cut its ratings on
both firms to "neutral" from "buy", also citing valuation
grounds.
Mobile telecommunications firms Vodafone <VOD.L> and
Inmarsat <ISA.L> fell 0.3 and 1.5 percent, respectively, as
investors locked in some recent gains.
DEFENSIVE SUPPORT
BT <BT.L> gained 2.5 percent, topping the FTSE 100 <>
leaders board as Citigroup upped its rating for the telecoms
operator to "buy" from "hold" with an increased target price of
150 pence, up from 145 pence, citing valuation grounds.
Other defensively-perceived issues were the main support for
the FTSE. Utilities, drugmakers, food retailers and beverage
firms were all on the front foot.
Gas distribution utility Centrica <CNA.L> added 1.9 percent
helped by Nomura, which raised its target price to 370 pence
from 340 pence.
Food retailer Wm Morrison <MRW.L> climbed 0.8 percent having
been in the doldrums since reporting full-year results last
week, while pharmaceuticals AstraZeneca <AZN.L> and
GlaxoSmithKline <GSK.L> rose 0.2 and 0.5 percent, respectively.
Brewer SABMiller <SAB.L> rose 0.3 percent.
Energy stocks were also a support for the index. Oil giant
BP <BP.L> rose 0.5 percent and peer Royal Dutch Shell <RDSa.L>
gained 0.3 percent.
Investors looking for some direction await a batch of U.S.
data later today.
The March Empire State Index is scheduled for release at
1230 GMT, with U.S. February industrial output and capital
utilization numbers due at 1315 GMT, followed by March's
National Association of Homebuilders index after the London
close at 1700 GMT.
(Editing by Simon Jessop)
