* FTSE 100 down 0.3 pct, third straight week of losses
* Financials, miners drive FTSE down in cyclical slump
* Inmarsat jumps 13.5 pct, confirms takeover approach afterclose
* Standard Life Aberdeen bottom of FTSE 100(Updates prices, adds details)
By Helen Reid
LONDON, June 8 (Reuters) - Britain's leading stock indexfell on Friday, tracking a broad sell-off by European shares asinvestors faced the prospect of tightening financial conditionsand growing political risk.
The FTSE 100 closed down 0.3 percent for its thirdstraight week of losses. Germany's DAX dropped 0.4percent and Italy's FTSE MIB sank 1.9 percent.
Risk appetite has dried up this week a new Italiangovernment settled in and the European Central Bank indicated itmight end ultra-loose monetary policy earlier than expected.
Divisions on trade as G7 leaders' summit got under way addedto investors' anxieties.
"Events going on that people point to, such as the G7meeting, are all idiosyncratic things that have their impact,but I think often what you see is a broader story underneaththat is affecting everything and is probably exacerbating thosesituations," said Clark Fenton, chief investment officer atAgilis Investment Management. "I think it comes back toquantitative tightening."
On Friday financials were the biggest drag on the FTSE 100,as HSBC, Prudential, Lloyds andBarclays fell 0.3 to 1.2 percent.
Mergers and acquisitions drove the UK market. Satellite firmInmarsat surged on takeover speculation to end the day13.5 percent higher at the top of the FTSE 250.
After trading hours, the company confirmed U.S. firmEchostar had made an acquisition proposal, which its boardrejected on the grounds that it "significantly undervalued"Inmarsat.
Energy and mining stocks also fell as investors shed all thesectors seen as most exposed to the business cycle. Gold minerFresnillo led the selloff, tumbling 6.4 percent to thebottom of the FTSE 100.
Antofagasta, Anglo American, and Glencorefell 1.7 to 3.2 percent. Oil majors BP and RoyalDutch Shell dropped 0.6 to 1 percent.
Mid-cap miners Kaz Minerals, Hochschild and Centaminfell 3.2 to 8.2 percent.
The FTSE 100 hit its lowest in more than a week in earlytrading, but recovered during the day. It briefly turnedpositive as sterling fell after the European Union's chiefBrexit negotiator, Michel Barnier, called the UK's approach tofuture trade "fairly paradoxical".
Dollar-earning stocks, which benefit from a weaker sterling,were the best performers. Diageo, Unilever,Reckitt Benckiser and British American Tobaccorose 0.3 to 2.1 percent.
Standard Life Aberdeen shares dropped 3.5 percent,the biggest decline on the FTSE 100, after Lloyds Bankingsold its remaining stake in the asset manager.
Apart from Inmarsat, another silver lining on Friday wastelecoms firm BT. It outperformed the market, rising 1percent, after saying CEO Gavin Patterson would step down laterthis year after a poorly received recovery plan.
Mid-cap Auto Trader jumped 8.3 percent, extendingits rally since reporting results on Thursday, as brokers raisedtheir ratings on the stock.
(Reporting by Helen Reid; Editing by Larry King)