RPT-Fresnillo leads Britain's FTSE lower after dividend cut
* FTSE 100 down 0.2 pct at 6,604.21 pts
* Fresnillo tumbles 10.9 pct
* StanChart outperforms as update eases concerns
By Francesco Canepa
LONDON, Aug 6 (Reuters) - Britain's blue-chip share index fell in thin, volatile trade on Tuesday as a selloff in mining stocks, led by Fresnillo, more than offset gains in financials.
Shares in Fresnillo dived 10.9 percent in volume more than twice their 90-day average after the precious metals miner cut its dividend due to a fall in the price of gold. The shares have now halved in value since December.
Gold miners are often bought by investors looking for a high dividend yield at times of economic uncertainty when gold is seen as a safe haven. A 25 percent decline in gold prices this year has been exacerbated by signs of a pickup in growth in developed economies, hitting gold miners' shares especially hard.
Fresnillo peer Randgold Resources fell 5.5 percent on Tuesday as gold prices continued to fall following upbeat economic data.
Material stocks, covering metals and other basic commodities, knocked 15.1 points off the FTSE 100, which ended down 15.4 points, or 0.2 percent at 6,604.21 points, slipping further away from a two-month high of 6,696 touched last week.
Volumes was thin at 90 percent of the FTSE's 90-day average, causing trade to be volatile. The FTSE hit an intra-day low of 6,562.32 points before climbing back above its Monday's low at around 6,600, seen as a key short-term support level.
"I think we are going to stay above 6,600 for now," said Craig Erlam, a market strategist at Alpari.
He cited support from better economic data from Britain, Europe and the United States and expectations the Bank of England will state its intention to keep ultra-low rates for an extended period of time when it releases its quarterly Inflation Report on Wednesday.
Helping limit losses on the index were financial shares Standard Chartered and Legal & General after their first-half updates.
Shares in Asia-focused bank Standard Chartered surged 2.9 percent in volume 230 percent their 90-day average as management comments eased worries about the firm's exposure to a growth slowdown in emerging markets.
That lured investors back into the shares after an 8 percent fall in the past three months, including a 1.3 percent drop on Monday when peer HSBC missed forecasts with its half-year earnings.
"The results were less bad than expected," said Ivor Pether, whose 408 million pound ($627.66 million) British equity fund at Royal London Asset Management owns shares in HSBC and Standard Chartered.
"There were a lot of concerns and probably a few short positions expecting some negative comments about the emerging market background (but Standard Chartered made) more upbeat comments than HSBC."
Insurer Legal & General also rose, by 2.3 percent, after its first-half report, which included a larger-than-expected dividend increase.($1 = 0.6500 British pounds) (Editing by Susan Fenton)
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