UK shares break 3-day winning streak on U.S. rate hike worries

April 6 (Reuters) - Britain's main stock indexes snapped three sessions of gains on Wednesday as investors feared an aggressive U.S. monetary policy tightening and new Western sanctions on Russia would slow economic growth.

The blue-chip FTSE 100 index closed 0.3% lower, dragged down by Unilever which fell 1.1% after Barclays cut its price target on the Dove soap maker's stock.

However, gains in AstraZeneca and consumer staple stocks helped limit losses on the index.

Tobacco company Imperial Brands gained 3.3% to top the FTSE 100 after it forecast higher first-half profit.

Shares of rival British American Tobacco also rose 2.4%.

Market participants were cautious ahead of the minutes of the Fed's March meeting due at 1800 GMT which may indicate just how fast and how far policymakers will proceed in shrinking the size of its massive balance sheet and hiking interest rates to tackle inflation.

"Interest rates are definitely a risk but they are more of a risk in the United States. We suspect the outcome for Europe will be slightly more benign because it is structurally more at the risk of a recession," said Francis Ellison, portfolio manager at Columbia Threadneedle Investments.

A survey showed British households' financial situation is now the most precarious since the depths of the COVID-19 pandemic in the second quarter of 2020, due to a surging cost of living.

The domestically-focused mid-cap FTSE 250 index ended 1.2% down, while a gauge of euro zone stocks fell 2.3%.

Overall, the FTSE 100 has outperformed this year as surging commodity prices boosted mining and energy stocks, while financials got a lift from rate hikes from the Bank of England.

Hyve Group jumped 8.2% after the events group said it would sell its Russian business following boycott warnings from customers.

Design and engineering company Avon Protection slumped 19.1% after it said first-half profitability was hit by weaker-than-expected sales and higher costs.

Meanwhile, Britain froze the assets of Russian banks Sberbank and Credit Bank of Moscow, and said it would end all imports of Russian coal and oil by the end of 2022. (Reporting by Sruthi Shankar and Devik Jain in Bengaluru; Editing by Subhranshu Sahu, Uttaresh.V and Emelia Sithole-Matarise)