* FTSE down 0.2 pct after seven days of gains
* Miners take most points off index
* Defensive stocks gain as risk appetite retreats
By David Brett
LONDON, July 22 (Reuters) - Britain's top share index
drifted lower in mid-session trade on Wednesday, as mining
stocks and banks retreated following recent rallies as investors
took a breather after a seven-day winning streak.
By 1046 GMT the FTSE 100 <> was down 10.23 points, or
0.2 percent, at 4470.94.
Volume was light but marginally on the downside with miners
weighing heaviest on the FTSE as investors booked profits after
a recent rally on the back stronger raw materials prices
Rio Tinto <RIO.L>, Kazakhmys <KAZ.L>, Eurasian Natural
Resources <ENRC.L>, Anglo American <AAL.L>, Lonmin <LMI.L> and
BHP Billiton <BLT.L> fell between 0.6 and 4 percent.
"After some fantastic gains we're a little bit more cautious
this morning. We've moved from the bottom to the top of equity
trading range in a short space of time, probably the market
needs time to pause for breath," said Henk Potts, strategist at
Barclays Stock Brokers
"There's a lot of hope priced in about the strength of the
recovery ... hope is a good breakfast but a poor supper,
eventually we'll have to see some meat on the table if the rally
is to be sustained."
Insurers, which tend to be sensitive to retreating risk
appetite, were among the biggest fallers.
Aviva <AV.L>, Friends Provident <FP.L>, Legal & General
<LGEN.L>, Prudential <PRU.L>, Standard Life <SL.L> and Standard
Life <SL.L> fell between 1.7 and 2.8 percent.
Confederation of British Industry industrial data showed
that its manufacturing order book fell to its lowest since
January 1992. []
Other data also reminded investors that the UK economy faces
a long, slow road to recovery.
Britain's economy will return to growth in the last quarter
of the year, as companies start to rebuild inventories, but
strong growth will not return until 2013, the National Institute
of Economic and Social Research said. []
Banks were mostly lower. Barclays <BARC.L>, Standard
Chartered <STAN.L>, Royal Bank of Scotland <RBS.L> and Lloyds
Banking Group <LLOY.L> fell 0.1 to 2.1 percent but heavyweight
HSBC <HSBA.L> added 0.6 percent.
OILS IN DEMAND
Traders went after oil stocks as crude <CLc1> held its price
just below $65, off the lows earlier in July.
BG Group <BG.L> and Cairn Energy <CNE.L> rose 2.1 and 0.7
percent, respectively, but heavyweight BP <BP.L> lost 0.3
percent.
Defensive stocks were also in demand, with tobacco stocks,
utilities and food producers among the main supports for the
index.
British American Tobacco <BATS.L> added 0.6 percent and
Severn Trent <SVT.L> gained 1.2 percent.
Severn Trent extended Tuesday's gains, which followed an
in-line trading update, with broker Nomura saying that shares in
water companies have been overly pessimistic ahead of Thursday's
price determination by regulator OFWAT.
Pharma groups AstraZeneca <AZN.L> and Shire <SHP.L> also
moved higher, up 1.4 and 1.2 percent, respectively, but
GlaxoSmithKline <GSK.L> missed out, losing 1.1 percent ahead of
the firm's second-quarter results, due at 1100 GMT.
London Stock Exchange <LSE.L> shares fell 2.9 percent as
stock traded ex-dividend.
Across the Atlantic, U.S. Federal Reserve Chairman Ben
Bernanke said on Tuesday that the outlook for the long-suffering
U.S. economy was improving, but supportive policies would be
needed for some time to prevent rising unemployment from
undercutting recovery. []
(Editing by Karen Foster)
