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Britain's FTSE knocked by falling commodity shares

* FTSE 100 down 0.2 pct

* Miners, oil shares weigh on index

* Banks fall after latest Bank of England report

* RSA Insurance (LSE: RSA.L - news) boosts sector on price target upgrade (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

By Kit Rees and Alistair Smout

LONDON, March 29 (Reuters) - UK shares fell on Tuesday, giving up early gains after a drop in commodity-related shares intensified and banks turned lower following the Bank of England's latest financial stability report.

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The blue-chip FTSE 100 index was down 10.53 points, or 0.2 percent at 6,095.95 points by 1127 GMT.

The top fallers were mining companies, with Glencore (Amsterdam: GX8.AS - news) , Antofagasta (Other OTC: ANFGF - news) , Anglo American (LSE: AAL.L - news) , Rio Tinto and BHP Billiton (NYSE: BBL - news) all down between 2.2 percent 3.8 percent, tracking a dip in the price of copper.

Metal prices fell after the dollar strengthened ahead of a speech by Federal Reserve chair Janet Yellen who could signal interest rate hikes later this year.

Oil and gas stocks also took a hit after Brent crude fell over 2.5 percent, below $40 a barrel. In all, energy and basic material shares trimmed 16 points off the FTSE 100.

Bank shares turned lower after opening the session with gains.

The banking sector fell 0.7 percent after the central bank said the outlook for financial stability had worsened since its last quarterly report in November, and it also moved ahead with plans to require some banks to hold extra capital as lending growth started to pick up.

Some financials managed gains, however, with insurance stocks in demand. Both Deutsche Bank and Barclays (LSE: BARC.L - news) raised their target prices on RSA Insurance, sending its shares up 0.9 percent.

Aviva (Other OTC: AIVAF - news) and Standard Life (LSE: SL.L - news) also both gained.

"Those moving higher, Aviva, Standard Life, (are) the usual suspects where the yield play is concerned so there seems to be the end of the month bounce coming through in these stocks," Chris Beauchamp, analyst at IG (LSE: IGG.L - news) , said.

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Reporting by Kit Rees, Editing by Alison Williams)