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* FTSE 100 index closes 0.5 percent down
* Energy, mining shares among top fallers
* ITV lifted by AT&T/Time Warner proposed deal
By Atul Prakash and Sudip Kar-Gupta
LONDON, Oct 24 (Reuters) - Britain's top share index closedlower on Monday after energy stocks came under pressurefollowing a drop in crude oil prices and gold miners trackedweaker precious metals.
The blue-chip FTSE 100 index finished 0.5 percentlower at 6,986.40 points, further away from a record high of7,129.83 points reached on Oct. 11. The FTSE 250 mid-cap index fell 0.4 percent.
The UK oil and gas index dropped 0.6 percent asoil prices slid after Iraq said it wanted to be exempt from anOPEC deal to cut production.
"It's becoming increasingly clear that Saudi Arabia, alongwith the UAE and Kuwait will have to shoulder most of the outputcut for it to have any chance of happening," Jasper Lawler,analyst at CMC Markets, said.
Shares in BP, Royal Dutch Shell and TullowOil fell 0.4 to 1.8 percent.
Gold miners also lost ground as gold prices surrendered early gains to trade lower. Randgold Resources and Fresnillo shares were down 2.4 percent and2 percent respectively.
Mid-cap aerospace and defence company Cobham slumped13 percent after the company issued its second profit warning insix months.
"Capital allocation decisions seem to suggest a managementfixated on following the 'institutional imperative' to increasebusiness scope rather than necessarily increase per sharebusiness value," Gary Paulin, head of global equities atNorthern Trust, said in a note.
On the positive side, Provident Financial rose 2.8percent, the top gainer in the FTSE 100 index, after GoldmanSachs raised its price target on the stock. Budget airlineeasyJet climbed 1.4 percent after UBS upgraded it to"buy" from "neutral".
TV and media company ITV outperformed the broadermarket and closed 0.5 percent higher after AT&T's planned$85 billion takeover of Time Warner raised the prospectof similar consolidation in Europe.
"The AT&T/Time Warner deal faces regulatory scrutiny, butthe deal is nevertheless raising the possibility of similarsector consolidation within Europe," said Beaufort Securities'sales trader Basil Petrides.
The blue-chip FTSE 100 index is up around 13 percent sincethe start of 2016, but down by around 7 percent in U.S. dollarterms, due to a slump in sterling caused by Britain's shockBrexit vote in June to quit the European Union.
The fall in sterling has given a boost to many of the FTSE100's international companies which earn much of their revenuesin U.S. dollars, and therefore get a currency-related accountinglift as those dollars are converted back to pounds.
However, the drop in the U.S. dollar value of FTSE 100stocks is a potential negative for overseas investors for whomthe dollar is their benchmark currency reference. (Editing by Alison Williams)
