Energy shares knock UK FTSE on China woes, Russia sanctions

* FTSE 100 down 0.2 pct

* Energy shares weigh as Chinese data hits oil price

* New sanctions against Russia add to gloomy sentiment

* Drinks firms boosted by M&A expectations

By Francesco Canepa and Tricia Wright

LONDON, Sept 15 (Reuters) - Energy shares pushed Britain's top share index lower on Monday, hit by the combination of slowing economic growth in China, the world's top energy consumer, and new sanctions against Russia.

Oil firm BP was the single biggest drag on the FTSE 100, with fellow energy firms BG and Royal Dutch Shell (LSE: RDSB.L - news) not far behind, as Brent crude slumped to its lowest in more than two years, below $97 per barrel.

The fall came after lacklustre economic data from China cast a shadow over the outlook for oil demand at a time of abundant supply, threatening the profits of companies which make money selling oil and gas.

"Most of the big oil companies have their strategic targets based around $100 a barrel so we're still in that ballpark but it's all dependent on the duration (of the current oil price weakness)," Investec (LSE: INVP.L - news) energy analyst Neill Morton said.

"Psychologically, as far as the market is concerned, $99 can be closer to $90 than to $100."

Adding to a gloomy sentiment on the sector, the United States banned Western firms from supporting the activities of a number of Russian companies in oil exploration or production from deep water, Arctic offshore or shale projects.

BP, which owns 20 percent of Rosneft, Russia's largest oil producer, fell 0.9 percent, while Royal Dutch Shell (LSE: RDSA.L - news) , whose projects are among those that will have to be put on hold, dropped 0.4 percent.

Energy shares shaved 9 points off the FTSE, which was down 14.65 points, or 0.2 percent, at 6,792.31 points at 1046 GMT, extending its retreat from this month's 14-year high.

Bill McNamara, technical analyst at Charles Stanley (LSE: CAY.L - news) , saw 6,756 - the FTSE 100's 50-day moving average and the level at which it will have retraced 38.2 percent of its recent advance - as a short-term support level.

M&A BRIGHTENS MOOD

Brightening an otherwise gloomy market - hit too by concerns about the Scottish referendum and the prospect of a tightening in U.S. monetary policy - were signs of deal activity.

Dutch brewer Heineken (Other OTC: HEINY - news) said on Sunday it was approached by larger rival SABMiller (LSE: SAB.L - news) about a potential takeover, but that its controlling shareholder intended to keep the company independent.

SABMiller jumped 4.3 percent, topping the FTSE 100 leader board, while peer Diageo (LSE: DGE.L - news) was the second-top riser, 1.8 percent firmer, as traders bet on sector-wide merger & acquisition activity.

"There's obviously going to be further consolidation in there ... I think the whole of the beverage sector will be a good bet," said Joe Rundle, head of trading at ETX Capital.

Tour operator TUI Travel (LSE: TT.L - news) and majority owner TUI AG (Xetra: TUAG00 - news) meanwhile agreed the terms of a merger creating the world's largest leisure and tourism group with a combined value of 6.5 billion euros. TUI Travel rose 1.7 percent. (Editing by Catherine Evans)