* FTSE 100 down 0.4 percent
* Barratt hit by Liberum downgrade
* British Airways owner IAG regains poise
By Andrew Winterbottom
LONDON, July 18 British shares lost more ground on Friday as concerns about the situation in Ukraine undermined demand for risk assets, with housebuilder Barratt topping the fallers' list after an analyst downgrade.
The FTSE 100 index was down 0.4 percent at 6,708.47 points by 0843 GMT. It had dropped 0.7 percent on Thursday when investors already jittery about U.S. moves to target big Russian firms with new sanctions, were met with news that a passenger plane had been shot down over eastern Ukraine.
Safe-haven stocks were among the top gainers, including cigarette maker Imperial Tobacco, consumer goods group Reckitt Benckiser and water utility Severn Trent.
"We were buying the dips up until the plane crash. We are now a bit cautious and will not be taking new positions going into the weekend," said Mark Ward, head of trading at Sanlam securities.
Barratt Developments fell 3.1 percent, with traders citing the impact of a Liberum downgrade to "hold" from "buy", largely on valuation grounds.
Liberum analysts were relatively sanguine on the sector as a whole, however, finding "little to be afraid of" after looking at mortgage availability, mortgage regulation and rate rises as the most obvious threats.
British Airways owner IAG, which had fallen with the broader market in the previous session as news of the plane crash in Ukraine emerged, was also among the top risers, gaining 0.3 percent.
"It's really just a case of overreaction to the news and bargain hunting is going on today," said Matt Basi, head of sales at CMC Markets.
British Airways said on Thursday that it was keeping its once-a-day route between Heathrow airport and Kiev under review.
From a technical viewpoint, Craig Erlam, analyst at Alpari, said it is very difficult to be bullish on the FTSE 100.
"Should we break below last Thursday's lows of 6,643 ... it would further confirm the index as being in a downtrend." (Editing by Catherine Evans)