FTSE edges lower, Royal Mail and miners weigh

By Atul Prakash LONDON (Reuters) - The FTSE 100 edged lower on Friday, with Royal Mail falling after market regulator Ofcom published a discussion document reviewing the company and miners sliding after a drop in metals prices. The blue-chip FTSE 100 index was down 0.3 percent at 6,779.03 points by 1335 GMT after rising 0.6 percent in the previous session. Royal Mail fell 3.9 percent, the top FTSE faller, after Ofcom published a discussion document to review the company's efficiency, consider its position within the parcels sector and assess its potential ability to set wholesale prices in a way that might harm competition. Ofcom had first announced in June that it will start a fundamental review of how Royal Mail is regulated. "The news last month provoked some reaction, but investors are now waking up to the scale of the review that is being undertaken," IG analyst Chris Beauchamp said. "It seems that rather than just a regular survey, it is a far deeper investigation into the Royal Mail’s ability to set prices in the parcel sector, which is particularly vital for the firm as smaller competitors drop out." The UK mining index dropped 0.9 percent as prices of key metals fell on worries about demand from top consumer China. Miners Anglo American, BHP Billiton and Antofagasta dropped 0.5 to 1.4 percent. "Miners are reacting to metals prices. They have to find ways to constantly cut costs to stay ahead of the game as China is not growing as much as it was. The sector's outlook doesn't look great," David Battersby, investment manager at Redmayne-Bentley, said. Housebuilders also fell on concerns about the start of a rate hike cycle in the United Kingdom. Shares in Barratt Development, Taylor Wimpey and Persimmon fell 1.3 to 1.5 percent. Marks & Spencer's dropped 1 percent after Britain's biggest clothing retailer announced that John Dixon, the head of its non-food division, has resigned to become chief executive of another firm. (Additional reporting by Liisa Tuhkanen; diting by Tom Heneghan)