Britain's FTSE falls as investors brace for US, UK tightening

* FTSE 100 down 0.4 pct, lags continental indexes

* Oil and mining shares weigh on expectations of tighter Fed

* Property-based shares fall as BoE Carney says hike nearer

By Francesco Canepa

LONDON, Sept 25 (Reuters) - Britain's FTSE 100 lagged all major European indices on Thursday, as concern that Britain and the United States will soon tighten monetary policy pulled down mining and energy stocks, as well as companies exposed to the UK property market.

Shares (Berlin: DI6.BE - news) in oil major BP and global mining company BHP Billiton were the biggest drag on the FTSE 100, as oil and copper prices fell on expectations U.S. monetary policy will tighten at a time of sluggish demand from emerging markets.

Dollar-priced commodities have been hit by a surge in the U.S. currency, now at a four-year high against a basket of major currencies. Investors are positioning for the end of the Federal Reserve's quantitative easing programme next month, which some feel may pave the way for future interest rate hikes.

Shares in basic materials and energy companies knocked a combined 25 points off the FTSE 100, which was down 25.23 points, or 0.4 percent, at 6,681.04 points at 1312 GMT.

"The FTSE's weighting is so tilted towards oil and mining that it skews the performance significantly," said Shai Heffetz, managing director of spreadbetting firm InterTrader. "The UK economy, however, is doing well, so I'd go for a discrete selection of stocks and sectors rather than the FTSE as a whole."

He cited British supermarkets as an example of a sector due for a recovery after its recent selloff, which has seen shares in market leader Tesco (Xetra: 852647 - news) halve in price over one year.

Britain's biggest sporting goods retailer, Sports Direct, is also betting that shares in Tesco, down 0.7 percent at 1312 GMT, will stop falling. The firm said on Thursday it has written a put option on a small stake in the embattled supermarket chain.

BOE RATE HIKE GETTING NEARER

The FTSE 100 slightly extended losses in the afternoon after Governor Mark Carney said the Bank of England was getting nearer to raising interest rates.

The comment hit shares in real estate companies such as Hammerson (Other OTC: HMSNF - news) and builder Persimmon (Other OTC: PSMMF - news) , which stand to lose if higher borrowing costs puncture demand for UK property.

Securequity sales trader Jawaid Afsar expected the FTSE to fall further before rebounding to hit a record high of 7,000 points by the end of 2014.

"Given that this is a traditionally weak period in equity markets, I would not want to chase this market higher and would be happy to buy in the low 6,600 points area," Afsar said. "However, I still favour a move to 7,000 by year-end," he said.

(1 US dollar = 0.7853 euro) (Additional reporting by Sudip Kar-Gupta; Editing by Larry King)