* FTSE 100 index falls 0.4 percent
* BP, Rexam down following new sanctions on Russia
* ITV gains after share purchase by Liberty
By Atul Prakash
LONDON, July 17 (Reuters) - Britain’s top share index retreated on Thursday from a one-week high, with companies such as oil major BP and can producer Rexam falling after Washington targeted big Russian firms with new sanctions over Ukraine.
The blue-chip FTSE 100 index was down 0.4 percent at 6,761.04 points by 1414 GMT after hitting a week high in the previous session, when mining companies took a boost from growth data from China, the world’s largest metals user.
BP, down 2 percent, took the most points off the FTSE 100 after the United States imposed the toughest sanctions yet on Russia over what Washington says is Moscow’s failure to curb separatist violence in eastern Ukraine.
The targets included Russia’s largest oil producer Rosneft , in which BP owns 20 percent. Rosneft accounts for around a quarter of BP’s production.
“Investors are afraid that the tension could escalate further. It’s a concern for the market because Russia has said it will also come with some announcements to punish America and Europe. It’s not good for sentiment,” Frank Bonsee, equity sales trader at ABN AMRO, said.
Rexam, which generates about 7 percent of its total revenue from Russia, fell 3.4 percent. A downgrade by Deutsche Bank to “hold” from “buy” on factors including stretched valuations also added to the selling pressure.
“Geopolitical worries continue to make the headlines ... That combined with the summer doldrums means that there is no rush to get involved buying stocks,” said Lex van Dam, a hedge fund manager at Hampstead Capital.
Some other individual companies also added to the market’s weakness. Britain’s biggest sporting goods retailer, Sports Direct, posted a 20 percent rise in full-year profit and said it had made up with Adidas AG after a row over supplies of soccer boots and shirts.
But its shares fell 1.8 percent, with analysts saying that the stock was not cheap given the uncertainties regarding Adidas and corporate governance. The Sports Direct board has wrestled for years over bonus payments to founder Mike Ashley.
The index’s losses were capped by some strong gainers. ITV surged 5.6 percent after cable group Liberty Global bought a stake in the free-to-air broadcaster from ITV’s biggest shareholder BSkyB, sparking speculation of a full takeover.
“ITV is now likely to be seen as a potential M&A story,” analysts at Liberum wrote in a note. “We would not expect an immediate bid: but Liberty’s purchase suggests it may be interested in acquiring the asset at some point.”
ITV’s trading volumes were more than five times its 90-day daily average, against just 50 percent of the 90-day average for the FTSE 100 index.
Analysts said the market was also pausing after strong gains in recent sessions and waiting for earnings announcements from companies such as British land, ARM Holdings and GlaxoSmithKline in the coming sessions.
“It’s not surprising that people would use the earnings season to take some profits when the earnings numbers have been somewhat mixed,” Graham Bishop, senior equity strategist at Exane BNP Paribas, said. (Additional reporting by Tricia Wright; Editing by Mark Trevelyan/Ruth Pitchford)