By Shashwat Chauhan and Sruthi Shankar
(Reuters) -Britain's FTSE 100 fell for a second session on Tuesday, as miners came under pressure from weaker gold prices and Moody's downgrading its outlook on China, while Barclays (LON:BARC) dipped after Qatar Holding cuts its stake in the lender.
Barclays fell 2.5% after Qatar Holdings, one of the bank's largest shareholders, moved to sell around 510 million pounds ($644 million) of its stock.
The blue-chip FTSE 100 closed down 0.3%, with precious metal miners acting as the biggest drags as gold prices eased from all-time highs in the previous session. [GOL/]
Industrial metal miners dropped 1.3%, mirroring losses in copper prices, after Moody's cut its outlook on China's credit ratings to negative from stable, citing concern over the impact of surging local government debt and a deepening property crisis.
Daniela Sabin Hathorn, senior market analyst at Capital.com said the downgrade was an influential factor in Tuesday's fall.
"But we're coming from a period where we've seen a 'buy everything' rally and we're seeing that tested today," Hathorn added.
China-exposed lenders HSBC (LON:HSBA) and Standard Chartered (LON:STAN) slipped 0.1% and 1.1%, respectively, while insurer Prudential (LON:PRU) lost 1.3%.
Meanwhile, trading in small company shares on the London Stock Exchange was halted twice on Tuesday due to outages, the second time in less than two months that dealing in such shares has been disrupted.
Trading was temporarily stopped twice on the FTSE small cap index, affecting hundreds of stocks including Tullow Oil (LON:TLW) and CMC Markets. The small cap index closed up 0.1%.
The domestically focussed FTSE 250 mid-cap index added 0.7%, with electronic component manufacturer Discoverie Group surging 16.4% to the top of the index as its order book returned to a "normal level".
A survey showed activity in Britain's services sector grew in November after three months of declines but companies reported an uptick in prices charged, a potential concern for the Bank of England ahead of its interest rates decision next week.
Investors have priced in the Bank Rate remaining at 5.25%.
Traders are also awaiting a slew of U.S. labour market data this week to gauge the next policy moves by the Federal Reserve.