Britain's FTSE falls as banks, miners slide

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* FTSE 100 down 0.2 pct

* Banks, miners under pressure

* Downgrades hit Ashtead, Carnival

By Kit Rees

LONDON, Dec 19 (Reuters) - Britain's top share indexretreated on Monday, weighed down by a fall among miningcompanies and banks, while Ashtead Group and Carnival were hit by downgrades from brokers.

The blue chip FTSE 100 index slid 0.2 percent at6,998.62 points by 1023 GMT, dipping below thepsychologically-significant 7,000-point level.

Shares in banking stocks Barclays, StandardChartered and HSBC were among the top fallers,down between 1.5 percent to 2.1 percent and tracking a broaderdecline among European banks.

Analysts said that uncertainty among Italian banking shares,in particular regarding a share issue from troubled lender Montedei Paschi, was dampening the sector.

"We're still waiting to hear whether Monte dei Paschi willbe successful in that last-ditch attempt to raise the money itneeds," Mike van Dulken, head of research at Accendo Markets,said. "Until we get more clarity, the bank sector is going to bea little on edge."

Shares in mining companies also came under pressure as theprice of copper touched a three-and-a-half-week low, with AngloAmerican and Rio Tinto both down around 1.5 percent.

While shares in British mining stocks have rallied around 96percent so far this year, analysts at Deutsche Bank highlightedan acceleration or deceleration in Chinese consumption as a keyrisk for the sector.

"We expect cash to be returned to shareholders, but areconcerned 'house-keeping' capex could start to creep up and newprojects could be approved. We doubt that major M&A will make acomeback, and after the 100 percent rally year to date, we nowhave little upside to our TPs," analysts at Deutsche Bank saidin a note.

Downgrades also weighed on shares. Cruise operator Carnival dropped 1.9 percent after a downgrade from Berenberg to"hold" from "buy", citing recent trends in the cost of fuel anda strengthening dollar as headwinds for the stock.

Likewise Ashtead Group slipped 1.6 percent after UBSdowngraded the equipment rental firm to a "sell".

UBS analysts said that pricing pressure was increasing forAshtead, and that they saw a limited benefit from any increasein U.S. infrastructure spending.

Outside of the blue chips, shares in utility Drax Group rose 3.3 percent after an upgrade from SocGen to "buy"from "hold". (Reporting by Kit Rees; editing by Mark Heinrich)