FTSE falls on profit taking, retail woes

* FTSE 100 falls 0.4 percent

* Miners provide support as metal prices firm

* Retail gloom keeps sentiment in check

By Simon Falush

LONDON, Jan 19 (Reuters) - Britain's top shares fell on Wednesday, dragged down by banks and miners, while sentiment in the retail sector was dented by a profit warning from Kesa <KESA.L> and worries about the long-term future of HMV <HMV.L>.

Europe's third largest electricals retailer, FTSE 250 <.FTMC> listed Kesa <KESA.L>, fell 10 percent after warning that adjusted pretax profit was likely to come in at the lower end of expectations.

Smallcap HMV <HMV.L> tumbled 9 percent as credit insurers reduced the cover they are prepared to give to suppliers of the music and book retailer. [ID:nLDE70I0FN]

Concern about the health of Britain's retail sector also pressured clothing retailer Next <NXT.L>, and Marks & Spencer <MKS.L>, which fell 1.4 percent and 1.5 percent, respectively.

Morrison Supermarkets <MRW.L> fell 1.1 percent after a downgrade from Morgan Stanley to "underweight".

By 1157 GMT, the FTSE 100 <.FTSE> was 23.26 points, or 0.4 percent lower at 6,033.17 after it rose for a third day to close at its highest since May 2008 on Tuesday.

"There's a bit of a dance going on, the indexes go up and hit new highs and then pull back as nervousness creeps in," said Karen Olney, head of thematic strategy at UBS.

Banks and miners were also weaker, retreating after strong gains the previous session. Barclays <BARC.L> fell 1.4 percent while Rio Tinto <RIO.L> lost 0.5 percent.

The sharpest faller was Imperial Tobacco, which fell 3.2 percent after going ex-dividend.

PEARSON PLEASES

Publisher Pearson <PSON.L> was the top gainer, rising 5.8 percent after it raised its profit forecast for the second time in three months.

Though equities were slightly weaker, many analysts remain bullish on the overall outlook, with U.S. corporate results providing grounds for optimism.

After the New York closing bell, Apple reported better-than-expected fourth-quarter revenue, fuelled by blockbuster holiday sales of the iPhone and iPad, sending its shares up over 4 percent. [ID:nNL3E7CI0LO]

Fellow U.S. tech giant International Business Machines Corp <IBM.N> also reported a stronger-than-expected quarterly profit after-hours. [ID:nN18146899]

"There's no reason to change, equities are the only game in town, consumer spending is on the march as shown by strong numbers from Apple and IBM," said David Buik, senior partner at BGC Partners.

The number of Britons claiming unemployment benefit fell unexpectedly last month, while the number of people out of work rose in the three months to November, official data showed on Wednesday [ID:nAHLICE7C9].

U.S. corporate earnings will be in focus, particularly from the financial sector, with Goldman Sachs <GS.N>, Bank of New York Mellon <BK.N>, State Street <STT.N>, and Wells Fargo <WFC.N> all due to report numbers ahead of the New York open.

Across the Atlantic, December U.S. housing starts and building permit numbers will be a focus at 1330 GMT, with the weekly mortgage and refinancing indexes also due for release. (Editing by Louise Heavens)