* FTSE 100 down 0.2 percent
* Vodafone weighs as Fitch, Oriel warn about cost of
* Gold miners hit as investors sell out of the safe-haven
By Francesco Canepa
LONDON, March 18 Britain's FTSE 100 fell
on Tuesday, with Vodafone the biggest drag on the
blue-chip index as investors worried that the mobile group's
profits and balance sheet will take a hit from its expansion
Gold miners also weighed on the FTSE, falling along with the
price of the yellow metal, widely considered a safe-haven asset
at turbulent times, as the likelihood of immediate military
conflict in Crimea faded.
Shares in Vodafone fell 1 percent as Fitch Ratings said it
would likely downgrade the group's rating by one notch if it
acquires Spain's largest cable operator Ono without taking other
measures to reduce its debt.
The acquisition of Ono, announced on Monday, is Vodafone's
third buyout of a European fixed-broadband asset in two years
and is part of its push to offer fixed-line and mobile services,
pay TV and broadband.
Oriel Securities downgraded Vodafone's stock to "reduce"
from "hold" following the deal, arguing that the cash the group
would fork out to expand its bundled offering would hurt its
profitability and increase its net debt.
"In order to defend its mobile business Vodafone has to keep
buying fixed-line assets at very high multiples," Oriel's
analyst John Karidis said.
"Vodafone's balance sheet is not stressed by any stretch of
the imagination but...I fully expect the net debt to keep
Vodafone's shares have fallen around 11 percent from a
13-year high hit in February.
The stock knocked 2 points off the FTSE 100, which was down
12.55 points, or 0.2 percent at 6,555.43 points at 0908 GMT.
Gold miners Fresnillo, was the top FTSE faller, down 4.9
percent as U.S. gold futures slipped about 1 percent, hovering
below a six-month high hit in the previous session. Randgold
fell 1.7 percent.
Traders said investors were offloading their positions in
the yellow metal and its miners as the threat of war in Ukraine
was seen as easing. But they cautioned that any fresh sign of
tensions between Russia and the West on Crimea could refuel a
rise in gold.
Market participants turned their attention to the Federal
Reserve's two-day meeting, where the central bank is expected to
vote to reduce its monthly asset purchases by another $10
billion and could also alter its forward guidance in its
statement. The meeting starts on Tuesday.
The FTSE got some support from Chilean copper miner
Antofagasta, which unveiled a better-than-expected
dividend for 2013, sending its stock up 3.1 percent.