By Atul Prakash and Alistair Smout
LONDON (Reuters) - FTSE fell on Thursday following a drop in mining stocks on the back of weaker metals prices, although losses were limited by a rally in telecom firm BT Group after its strategic acquisition.
Shares in BT rose 4.6 percent to a 14-year high after saying it agreed a 12.5 billion pound ($19 billion) deal for mobile operator EE, with the share price absorbing news that the firm will raise 1 billion pounds through a placing of new stock to help fund the move.
"BT is the biggest service provider in the UK ... and now they're taking on EE's 33.8 percent share in the mobile sector, which is significant," Trent Earwaker, trader at LONTRAD, said.
"It would certainly seem like good value, but that depends on whether prices will have to rise by much to help pay for it."
On a sector level, miners lost ground again. The UK mining index fell 1.4 percent, tracking a 2 percent fall in copper prices on a rise in metal inventories. Global miner BHP Billiton fell 2 percent, while Glencore was down 2.6 percent.
The FTSE 100 index was down 0.4 percent at 6,833.19 points by 1106 GMT, also pressured by some company results. Drugmaker AstraZeneca fell 3 percent after saying its fourth quarter results missed expectations.
"AstraZeneca has disappointed - revenue is up but weaker headline figures will weigh on the shares," Mark Ward, head of execution trading at Sanlam Securities, said.
Investors also traded cautiously due to jitters in Greece after the European Central Bank hardened its financing rules for Greek banks, sending their shares sharply down and dragging down regional stock markets.
The ECB abruptly cancelled its acceptance of Greek bonds in return for funding, shifting the burden onto Athens' central bank to finance its lenders and isolating Greece unless it strikes a new reform deal.
"The ECB is trying to keep Greece in line by cancelling its acceptance of Greek government bonds in exchange for funding, and this has sent a ripple through equity markets. The ECB is showing Athens who is boss," IG analyst David Madden said.
Among other individual movers, Compass Group rose 2 percent after the world's biggest catering firm maintained its full-year outlook.