Weak miners pressure FTSE, Tesco drops before update
* FTSE 100 down 0.8 percent, trading volume light
* Miners fall, tracking copper prices lower
* Analyst comments knock Tesco ahead of trading update
* Debenhams, Halfords pressured by analyst downgrades
By Tricia Wright
LONDON, Dec 2 (Reuters) - Weak miners dented Britain's top shares on Monday, tracking copper prices lower as traders bet on more falls for the broader market, while Tesco dropped on analyst downgrades ahead of a trading update later in the week.
Miners shed 2 percent, hit by a lower copper price as concerns over swelling supplies overshadowed improved manufacturing data from top metals consumer China.
They accounted for around a fifth of the FTSE 100's falls, with the index off 55.24 points, or 0.8 percent, at 6,595.33 points by the close. Light volumes, at just over three quarters of the 90-day day average, exaggerated market moves.
Analysts said the index's long-term upward trend remains intact, but the more immediate outlook is looking increasingly bearish. It has been trending lower since the end of October, shaving its advance in 2013 to around 12 percent.
"It wouldn't be a surprise for us to see a further pull-back, at least in the short term, given the strong performance that we've seen year to date," said Henk Potts, market strategist at Barclays.
"But the longer-term fundamentals (economic recovery coupled with corporate profitability growth) still would suggest that equity markets will outperform other asset classes during the course of next year."
Fawad Razaqzada, technical analyst at Gain Capital, reckons the index could fall as far as 6,506, its 200-day moving average, but will be contained around that level.
Signs of weakness in the euro zone economy took their toll on investor sentiment. Spain's manufacturing sector contracted for the first time since July, underscoring the fragility of the recovery in the euro zone, Britain's top trading partner.
While the British economy is improving - with job growth pushing a closely watched manufacturing survey to a near-three-year high in November - consumer demand remains fragile, forcing retailers into stiff price competition.
Tesco fell 2 percent after HSBC downgraded it to "underweight", saying the company needs to lower margins, and Goldman Sachs lowered its estimate for third-quarter earnings.
The world's third-biggest retailer is expected to slip back to an underlying sales decline in Britain when it publishes quarterly trading data on Wednesday.
Department store chain Debenhams shed 3.9 percent as Barclays cut it to "underweight", blaming margin-dilutive online sales, while Halfords was hit by a JPMorgan downgrade to "neutral", which cited valuation grounds. The bicycles-to-car-parts group shed 4 percent.
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