Syria, stimulus concerns knock Britain's FTSE
* FTSE 100 down 0.6 pct at 6,454.63
* Heightening Middle East tensions impacts markets
* Financials down, RBS weighed on by worries over break-up
* Miners fall, Antofagasta profits fall
By David Brett
LONDON, Aug 27 (Reuters) - Financials and miners dragged Britain's FTSE 100 lower on Tuesday with the index struggling for momentum as concerns about possible intervention in Syria and stimulus withdrawal by the U.S. Federal Reserve crimped risk appetite.
Reopening after a public holiday, London's blue-chip index shed 37.47 points, or 0.6 percent to 6,454.63, by 1027 GMT, albeit in low volumes.
Possible military action by the United States against Syria, as well as concerns over the economic impact if the U.S. scales back stimulus as early as September and a row in Italy that is threatening to bring down the coalition were all cited by traders as reasons for investors to take profits on a two-day rally.
"The FTSE 100 has bounced from (seven-week) lows but remains lacklustre as concerns over Syria and the political chaos in Italy continue to cap any potential gains in the short term," Matt Basi, head of UK sales trading, said.
"It might be that the bulls are once again hoping for weak U.S. data, with yesterday's (durable goods) numbers from the States already giving way to speculation of a delay in tapering the QE programme," he said.
Financials - banks, insurers and asset managers - which are highly exposed to the fortunes of the broader economy took 19 points off the FTSE 100.
UK lender Royal Bank of Scotland was the biggest percentage faller, down 3.3 percent. Traders cited an article in the Financial Times saying that a group of MPs had demanded a break-up of the bank amid speculation that the proposal to split the lender into a good and bad bank would be thrown out.
Riskier miners, already down 15.1 percent in 2013 on concerns over dwindling demand from the world's largest economies, took another 9 points off Britain's leading share index as Antofagasta announced first-half profit had dropped by nearly a third. Its shares fell 2.7 percent.
Precious metals miners such as Fresnillo and Randgold Resources, however, bucked the weaker trend. They rose as much as 6.6 percent, in tandem with the rising gold price, as investors used the equities as a proxy for the safe-haven metal, which is rebounding amid economic uncertainty.
A rise in oil prices on the back of turmoil in the oil-rich Middle East are seen as a potential drag on airline shares, according to broker Investec.
Currently around $111 a barrel, Investec said in a note that prices above $100 a barrel were a severe headwind to airlines' profitability and one of the reasons it cut its rating on British Airways owner IAG to "hold" from "buy" in a broader note on airlines.
IAG fell 4 percent.
UK oil services firm Petrofac, however, jumped 5.1 percent in heavy volume after the company said it expects a stronger second-half performance, with analysts at Liberum saying the share was a "buying opportunity" on recent weakness.
Britain's Bunzl, distributor of goods such as carrier bags and hygiene products, rose 2 percent after delivering above-forecast first-half profits, prompting Investec to raise its target price on the stock.
Bullish broker comment also helped retailer Marks & Spencer (M&S) rise 2.2 percent after Citigroup raised its recommendation on the company to "buy" from "neutral".
"The combination of recent, material upgrades to UK economic growth forecasts, and M&S management initiatives have markedly improved the credibility of double-digit 2015 and 2016 M&S EPS growth forecasts," Citi said in a note. "We argue that this should underpin the group's current undemanding valuation metrics." (Editing by Susan Fenton)
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