By Sudip Kar-Gupta
LONDON (Reuters) - Britain's top share index retreated from five-month highs on Monday, with leading companies such as miner Fresnillo (L:FRES) and utility Centrica (L:CNA) hit by broker downgrades.
Investors adopted a cautious approach as debt-laden Greece and EU paymaster Germany drew firm battle lines on Monday in talks on the future of Greece's unpopular international bailout. European Union officials were pessimistic about any early deal.
The blue-chip FTSE 100 index (FTSE) closed down 0.2 percent at 6,857.05 points, down from a five-month high it reached on Friday.
The gold and silver mining company Fresnillo (L:FRES) was the worst-performing FTSE 100 stock in percentage terms, falling 4.4 percent after Morgan Stanley (NYSE:MS) cut its rating to "equal weight" from "overweight".
Centrica also weakened by 2.9 percent after investment bank Citigroup cut its price target on Centrica's shares.
Kyri Kangellaris, director at Horizon Stockbroking, said he would rather be betting on declines on the FTSE than betting on gains.
"The market is in a bit of a wait-and-see mode at the moment, because of Greece," he said. "I'd rather be 'short' than 'long' at these levels."
Online gambling firm 888 Holdings (L:888) dropped 11.1 percent after talks on a takeover by William Hill (L:WMH) ended.
However, bid speculation drove up the shares of drinks group SABMiller (L:SAB) by 1.9 percent. The Mail on Sunday had reported that investment firm 3G Capital was weighing a 75 billion pound bid for SABMiller.
The FTSE 100 reached a peak last year of 6,904.86 points, its highest since early 2000. Although it lost ground at the end of 2014, the index is up around 4 percent so far in 2015.