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* Prudential drops on plans to raise $2.9 bln in Hong Kong
* Britain considers offering state-backed loans to energy
firms
* Banking sub-index drops to lowest since February
* FTSE 100 down 0.9%, FTSE 250 off 1.1%
(Updates to close)
By Shashank Nayar
Sept 20 (Reuters) - London's FTSE 100 ended at a two-month
low on Monday, dragged down by heavyweight miners and banking
stocks, while concerns about rising inflation also weighed on
the index ahead of a rate decision by the Bank of England (BoE)
this week.
The blue-chip FTSE 100 index fell 0.9%. Miners
Glencore and Anglo American and financial
stocks Prudential and HSBC Holdings led the
declines.
Banking shares were the biggest fallers with
their sub-index down 4%, tracking benchmark bond yields lower
as investors sought safety in government bonds on
concern over the problems at Chinese property group China
Evergrande.
Investors now await the BoE's policy meeting this week for a
timeline on its plan to ease its massive pandemic stimulus
against the backdrop of rising inflation pressures from supply
chain disruptions and higher energy prices.
"It is quite clear there is a growing sense of unease about
the economic outlook as a growing number of companies look ahead
to the prospect of rising costs, and the possible effects on
their profit margins, at a time when central banks are coming
under pressure to pull back on the generosity of their current
stimulus measures," said Michael Hewson, chief market analyst at
CMC Markets UK.
The FTSE 100 is still on track to record gains for this
year, but the pace of those gains has recently slowed after it
fell for three straight weeks over concerns of rising costs and
evidence of slowing economic growth.
Britain's Prudential Plc ended 8.4% lower to be the
heaviest loser on the FTSE 100 after saying on Saturday it plans
to raise HK$22.5 billion ($2.9 billion) through a concurrent
public offer and international share placing on the Hong Kong
Stock Exchange.
On a positive note, British travel stocks gained on reports
that the U.S. is planning to relax travel curbs on vaccinated
passengers from the European Union and Britain.
Shares of IAG soared around 11%, while Wizz Air
, easyJet and SSP Group gained between
1.4% and 5.9%.
The domestically focused mid-cap index fell 1.1%.
(Reporting by Shashank Nayar in Bengaluru; editing by
Uttaresh.V and Hugh Lawson)
