FTSE falls from four-month high; commodities shares weigh

* Blue-chip FTSE 100 index falls 1 percent

* Commodities shares slide, tracking oil and metals prices

* Centrica (LSE: CNA.L - news) gains as Credit Suisse (NYSE: CS - news) upgrades to "outperform"

By Atul Prakash

LONDON, Jan 27 (Reuters) - Britain's top equity index fell on Tuesday after rising for eight straight sessions to a four-month high, with commodities shares losing ground on weaker metals and oil prices.

Mid-cap oil producer Afren (LSE: AFR.L - news) plunged 66 percent after saying it was in talks with its largest bondholders over its liquidity and funding needs.

The blue-chip FTSE 100 index was down 1 percent at 6,781.81 points by 1550 GMT, after rising for more than a week mostly on expectations the European Central Bank (ECB) would begin buying government bonds to stimulate the euro zone economy. The ECB announced such a programme late last week.

The UK Oil and Gas index fell 1.2 percent, as a stronger dollar led Brent oil prices to give up early gains and turn negative.

"Oil prices are causing a great concern for some investors. People are getting into the mindset that there isn't going to be a quick-fix," David Battersby, investment manager at Redmayne-Bentley, said, referring to the recent slump in crude prices.

Miners also slipped as copper prices fell 1.6 percent on concerns of slowing growth in top consumer China, weak U.S. business investment and rising metal inventories. The UK mining index fell nearly 1 percent.

Banks also slipped, with the sector index falling 1.5 percent and banks such as Barclays (LSE: BARC.L - news) , Royal Bank of Scotland and HSBC dropping 0.8 to 2.2 percent, with traders citing news of UK banks facing hefty credit card claims as one of the reasons for their weakness.

Around two million Britons who may have been mis-sold insurance to cover events such as credit card fraud will be asked to vote for a scheme that could cost top high street banks hundreds of millions of pounds in compensation.

But some analysts were positive on the broader market's prospects on technical grounds.

"The FTSE is seeing some profit-taking ... However, (it) is flirting with levels seen last year. Technically, the charts point for an upside break towards the 7,000 level," said Jawaid Afsar, a trader at Securequity.

The market also reacted to UK growth data. Traders said the FTSE 100 initially trimmed losses on data showing the country's gross domestic product slowed more than expected in the last quarter of 2014, raising hopes interest rates would stay low for a longer period.

However, concerns the slow pace of economic recovery in the rest of Europe, Britain's key trading partner, could hurt growth in 2015 prompted some investors to become cautious, they added.

On the positive side, Centrica climbed 4.2 percent to 283.10 pence after Credit Suisse raised its stance on the stock to "outperform" from "neutral" and increased its target price to 310 pence from 290 pence. (Additional reporting by Alistair Smout; Editing by Mark Potter)