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* FTSE 100 flat, CMC and IG hit FTSE 250
* Commodity stocks drop, HSBC rises after upgrade
By Alistair Smout
LONDON, Dec 6 (Reuters) - Britain's mid-caps underperformedblue-chip peers on Tuesday, as spreadbetting firms' stockstumbled after regulators announced a possible crackdown on someof their products.
Britain's financial watchdog proposed tougher rules forretail financial spread betting products known as "contracts fordifference" (CFDs) after finding that 82 percent of customersusing them lost money.
Mid-caps CMC Markets and IG Group were bothdown about 25 percent, while Plus500 fell 28 percent.
"This is negative - period - and CMC Markets and IG Group -the two that operate to the highest standards in the industry inour opinion - are collateral damage," RBS analysts said in anote.
"We do not believe that they are the intended targets, butwill be negatively impacted nonetheless."
The British mid-cap FTSE 250 was down 0.4 percent,while the blue-chip FTSE 100 was flat.
The mining and oil sectors were among the biggest weights onthe FTSE 100, as copper and Brent crude prices eased back.
Oil prices eased as crude output rose in virtually everymajor export region despite plans by OPEC and Russia to cutproduction, triggering fears that a fuel glut that has doggedmarkets for more than two years might last well into 2017.
However, the FTSE 100 was supported by a rally in bankstocks. Top riser on the index was HSBC, up 2.9percent, with traders citing a Morgan Stanley upgrade to"equal-weight" from "underweight".
Strong month-long rallies for industrial equipment hirecompany Ashtead and heating and plumbing supplierWolseley stalled after their respective results.
Ashtead was roughly flat, despite early gains on the back ofresults at the upper end of expectations, and Wolseley fell 1.2 percent despite solid results.
Both sets of results were accompanied by bullish statementson the strength of U.S. growth, a factor investors have alreadypriced in.
The stocks are up 25 percent and 11 percent respectivelyfrom lows touched after the election of Donald Trump as U.S.president, having rallied strongly on hopes of an increase inU.S. infrastructure spending.
Mid-cap Drax surged more than 14 percent after itsaid it plans to buy Opus Energy for 340 million pounds. (Editing by Louise Ireland)