London mining stocks gave pause to their recent rally on Wednesday, leading the FTSE 100 share index lower and short of chartists' resistance around the 5,700 level, with Tullow Oil was the top faller after disappointing on its production outlook this year.

The index was down 21.73 points, or 0.4 percent at 5,672.22 by 09:03 a.m. BT, having gained more than 1 percent over the previous two days, and followed weakness towards the close overnight on Wall Street and a muted performance in Asia.

The UK index is trapped within a range having closed below 5,700 on Tuesday, a level it has failed to breach at the close since early Nov, 2011.

If there is any encouraging news for the UK index at this stage it is that many of its constituents are pushing up through their post-correction highs (going back to late November when the index hit a closing low around 5,127), said Bill McNamara, technical analyst at Charles Stanley.

McNamara said in the event of a reversal, he expects to see some support from the short-term uptrend, at around 5,600, but if the rally in the miners were to continue the index would break through to new highs.

The mining sector <.FTNMX1770>, however, was lower on Wednesday, in tandem with base metal prices after copper hit a two-month high in the previous session, as investors banked profits following robust Chinese growth data on Tuesday.

If the old adage of buying on the dips is relevant in these choppy markets, so too is sell the rallies, albeit a minor one, and that's all we're seeing here, a London-based trader said.

African Barrick Gold shed 3.8 percent after it reported fourth-quarter gold production fell 11 percent and missed its annual production targets.

Rio Tinto , which reported near-flat production growth of iron ore for the fourth quarter on Tuesday, fell 1.3 percent.

Integrated oils <.FTNMX0530> added their weight to the index falls as investors secured recent gains, while Tullow Oil slid 7.3 percent as the oil explorer's latest trading update flagged a production decline, with net asset values (NAV) likely to fall as a result.

Oriel Securities said that overall it anticipates its current 'risked net asset' value for Tullow of 882 pence per share will fall by around 40-60 pence per share reflecting lower production in 2012 and higher capital expenditure.


BT Group shed 1.4 percent as UBS downgraded the telecoms firm to neutral from buy, citing concerns over valuation, competition from Sky fibre and YouView and the firm's pension.

Banks <.FTNMX8350> fell as risk appetite ebbed and after Citigroup gave a stark reminder in the Unitied States of just how at risk lenders' forecasts are in the current climate, as it reported weaker than expected earnings.

Royal Bank of Scotland , which had posted robust gains recently as investors cheered its restructuring plans, was down 2.2 percent.

HSBC was off 0.1 percent as UBS cut its 2012 forecasts by 10 percent, saying its revenue potential continues to drift off.

HSBC is trading at a multi-year low on price/tangible NAV, at 1.1 times. Its dividend yield, a prospective 5.3 percent, provides significant support ... However, without top-line growth we see no rush to buy the shares, UBS said.

Banks are heavily exposed to the euro zone debt crisis and investors will have one eye on the debt market as Portugal tests investor confidence in a debt sale and Greece resumes talks on its debt restructuring.

On the upside, but still with financials, fund firm Man Group rose 5.5 percent after its quarterly update.

Traders said despite the firm posting a second consecutive quarter of heavy client outflows and announced plans for further cost cuts, Man Group's shares have priced in the bad news, having lost more than a third of their value over the last three months.

On the macroeconomic front, British unemployment numbers will be released at 09:30 a.m. BT, with the December claimant count seen rising by 10,000, accelerating from a 3,000 increase in the previous month. November's ILO unemployment rate is seen steady at 8.3 percent.

(Editing by Greg Mahlich)