Vodafone, miners weigh on Britain's FTSE

Wed Jan 16, 2013 7:45am EST

* FTSE 100 down 0.6 percent

* Anglo knocked by Amplats strikes, Kumba warning

* Vodafone hurt by Deutsche Bank downgrade

* Imperial Tobacco top faller, trades ex-dividend

By Tricia Wright

LONDON, Jan 16 (Reuters) - Miners dragged down Britain's top shares on Wednesday as Anglo American fell on worker unrest at its platinum mines, while market heavyweight Vodafone dropped on a rating downgrade from Deutsche Bank.

The FTSE 100 was down 35.78 points, or 0.6 percent, at 6,081.53 by 1221 GMT, having gained around 3 percent since the start of 2013.

Anglo American fell 2.1 percent, underperforming a 1.6 percent decline in the mining sector.

The company laid out a blueprint for its Anglo American Platinum arm on Monday, but the plan to close two mines and sell one could mean 14,000 jobs lost and has been met with resistance from both the government and unions.

Anglo's Kumba Iron Ore unit has separately warned its 2012 profit likely fell by a third, hit by lower prices and an illegal strike. Societe Generale cut its rating for the stock to "sell" from "hold".

Vodafone shed 1.9 percent, alone knocking almost 6 points off the FTSE 100 index. Traders cited the impact of a downgrade by Deutsche Bank to "hold" from "buy", with analysts at the bank forecasting a slowdown in growth at the British mobile phones operator.

"We forecast growth deterioration through calendar 2013 with the outlook for financial full-year 2014 set to confirm declining free cash flow (FCF), no further dividend per share (DPS) growth and a scaled down buyback to avoid increased leverage," Deutsche Bank said in a European telecoms review.

Imperial Tobacco topped the FTSE 100 fallers' list on Wednesday, off 4.8 percent, as the stock traded ex-dividend.

Traders cited mounting worries about a looming political fight in Washington to lift the federal government's debt limit, uncertainty over U.S. corporate earnings and caution over the health of the global economy, thrown back into focus by weak German GDP figures on Tuesday.

"I still think a recovery in Europe and globally is the major concern, and I think investors are just being cautious," Michael Hewson, senior analyst at CMC Markets, said.

"We've seen a pretty good rally in the front part of January and I think it's just very sensible that investors start to take a little bit of money off the table ahead of important earnings as we head into the back part of the week."

Lynnden Branigan, technical analyst at Barclays Capital, was undeterred by Wednesday's pullback, remaining "cautiously bullish" on the UK benchmark, targeting 6,377, the May 2008 high, over the coming months.

"Only if we were to start to move back below 6,000 (resistance in March 2012) would we be a bit concerned that there was going to be a deeper correction," he said.

"The immediate risk is probably looking at the lows that we saw last week of 6,053 (the close on Jan. 8)."

The UK banking sector fell 1 percent as investors digested fourth-quarter earnings on Wednesday from U.S. banking heavyweights JPMorgan and Goldman Sachs , both of which beat expectations.

European banks have rallied nearly 50 percent since June as confidence in the sector has grown after central banks stepped up support to prevent the financial system from collapsing.

The recent relaxation of requirements from Basel 3 has also underpinned belief that lenders will soon be able return to paying healthy dividends.

More U.S. banks will report on Thursday as the U.S. earnings season rumbles on, with Citigroup and Bank of America Corp. scheduled to post numbers. (Additional reporting by Jon Hopkins and David Brett; Editing by Hugh Lawson)

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