(ADVISORY- Follow European and UK stock markets in real time onthe Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
* FTSE 100 down 0.2 pct
* Precious metals miners slump
* Banks rally after Fed rate hike
* Centrica jumps after lifting earnings
By Kit Rees
LONDON, Dec 15 (Reuters) - UK shares retreated on Thursday,hit by a fall among mining companies after the U.S. FederalReserve raised interest rates, though shares in banking stocksand Centrica rallied.
The blue chip FTSE 100 index was down 0.2 percent at6,935.65 points by 1009 GMT, underperforming the broader rallyacross European markets which was underpinned by gains in thebanking sector.
The U.S. Federal Reserve hiked interest rates by 25 basispoints on Wednesday and signaled an accelerated pace ofincreases in 2017.
The move weighed on shares of precious metals minersFresnillo and Randgold Resources, the biggestfallers on the blue chip index, down 8.7 percent and 6.9 percentrespectively after the price of gold fell to its lowest in over10 months, hit by a firmer dollar.
Similarly shares in miners Antofagasta, BHPBilliton, Anglo American and Glencore came under pressure from dollar strength, which makes the costof greenback-denominated underlying commodities more expensiveto holders of foreign currency.
UK banks, however, rose, with the FTSE 350 banking index up 0.7 percent, with Royal Bank of Scotland and Barclays the biggest risers, both up more than 2percent.
A U.S. rate rise is considered a positive for banks, whichhave struggled in a low-rate environment.
"Rising interest rates are generally quite good for banks,depending on their specific situation, but in general they aresitting on large deposit bases and they can make a bigger spreadas interest rates go up," Simon Gergel, CIO of UK Equities atAllianz, said.
Centrica was the biggest riser on the blue chipindex, gaining 5.5 percent and touching a 2-month high after theutility lifted its full-year guidance on better-than-expectedcost savings and a strong trading performance in a volatilemarket.
Among the midcaps, Just Eat advanced 1.9 percent tohit an all-time high after agreeing to buy its main UK rivalhungryhouse, an online food company, for an initialconsideration of 200 million pounds.
The online food delivery company also agreed to buySkipTheDishes in Canada. "Intuitively, we are positive on the transaction,consolidation is a good thing in online marketplace modelswhatever the vertical, this deal not only consolidates the UKeffectively, it also removes the possibility of a more radicalcombination for HH (hungryhouse)," analysts at Jefferies said ina note. (Reporting by Kit Rees; Editing by Janet Lawrence)