Britain's FTSE dragged lower by miners and Unilever

* FTSE 100 down 1.1 pct

* Miners extend falls on yuan devaluation

* Unilever (NYSE: UL - news) drops 3.7 pct (Adds movers, detail, updates prices)

By Liisa Tuhkanen

LONDON, Aug 12 (Reuters) - Britain's top share index was dragged lower on Wednesday by Unilever, hit by a broker downgrade, and by mining companies after China's devaluation of the yuan pulled down metals prices.

China, the world's second-largest economy and biggest metals consumer, devalued its currency on Tuesday after a run of poor economic data, raising the costs of imports.

London nickel, copper and aluminium all dropped to six-year lows on Wednesday as fears intensified that the weaker yuan would corrode demand.

The UK mining sector was down 1.8 percent by 1038 GMT after shedding 4.4 pct in the previous session.

Glencore (Xetra: A1JAGV - news) declined the most, dropping 5.3 percent.

Blue (OTC BB: BUES - news) -chip peers BHP and Anglo American (LSE: AAL.L - news) both fell around 1.2 percent, with mid caps Vedanta, Lonmin and Petra down between 0.7 and 5.9 percent.

"It takes a brave soul and deep pockets to buy these mining stocks when they're this heavily down," said Jasper Lawler, analyst at CMC Markets.

"I don't see them rebounding massively in the general context of things unless there's some sort of extra explanation by the People's Bank of China (HKSE: 3988-OL.HK - news) or some move by some other central bank to combat this devaluation."

The blue-chip FTSE 100 index was down 1.1 percent by 1040 GMT, slightly outperforming other European equities.

Consumer goods company Unilever shed 3.7 percent after Goldman Sachs (NYSE: GS-PB - news) cut it to "sell" from "neutral", saying the downgrade was prompted by the rise of e-commerce and slowdown in emerging markets.

"We see the company as negatively positioned with respect to the changes in the retail environment as the e-commerce channel grows," Goldman Sachs said in a note.

"Furthermore, (about) 60 percent of Unilever's sales come from (emerging markets), for which we expect structurally lower growth versus prior years and more competition in mass-market categories from local companies."

Randgold added 2 percent, one of the few risers on the blue-chip index, as the devaluation of the yuan supported gold prices.

In mid caps, Zoopla climbed 4.1 percent. The property website said on Wednesday it is winning back agents after months of losing listings to rivals and expects the number of branches using the comparison site to grow further. (Additional reporting by Kit Rees; Editing by Raissa Kasolowsky/Ruth Pitchford)