FTSE retreats from two-week high, miners weigh

By Kit Rees and Atul Prakash

LONDON (Reuters) - Britain's top share index slipped from a two-week high on Wednesday as luxury goods firm Burberry fell after a slump in its profits and miners tracked weaker metals prices.

The blue-chip FTSE 100 index was flat in percentage terms at its close at 6,165.80 points after rising on Tuesday to its highest level since May 3. The benchmark index is down 1.4 percent so far this year.

Burberry dropped 2.7 percent after saying it would overhaul its retail operations and simplify its product range, as its full-year profit slipped 10 percent.

The group also said it expected the market to remain challenging this year, meaning profit is likely to come in towards the bottom of market forecasts.

"Trading conditions in Hong Kong have taken their toll on Burberry," said Steve Clayton, head of equity research at Hargreaves Lansdown.

"The travelling Chinese luxury consumer is clearly still reluctant to come out and spend money at the moment, and as long as that remains the case, things are likely to remain tough for Burberry."

Among sectors, miners were hit hard after copper prices sank to their lowest since mid-February as the dollar rallied after a stream of encouraging U.S. economic data supported the case for more rate rises this year.

Prices of other industrial metals were also down.

The UK mining index fell 2.3 percent, the top sectoral decliner. Shares in Anglo American, Antofagasta, Glencore, BHP Billiton and Rio Tinto fell 2 to 3.6 percent.

On the positive side, British banking stocks were the top risers on the blue chip index, with the FTSE 350 Banks index gaining 1.7 percent. Royal Bank of Scotland, Lloyds Banking Group and Barclays all rose between 3.7 percent and over 4 percent.

Analysts pointed to the release of the U.S. Federal Reserve's minutes for the meeting in April after the market closes, which could be more hawkish than the meeting and indicate a potential rate hike in June.

"Banks are struggling in this low rate environment and their interest margins are rock-bottom, so the sooner the U.S. gets on and starts raising rates, the better it is for the banks' core business," Jasper Lawler, market analyst at CMC Markets, said.

U.S.-facing equipment rentals company Ashtead was also among the top gainers, rising 3.7 percent with analysts pointing to recent upbeat U.S. data fuelling investor appetite for the stock, as well as solid results from some of its U.S. sector peers.

(Reporting by Atul Prakash; Editing by Mark Heinrich)