* FTSE 100 down 0.03 percent
* Banks lower, tracking falls by German peers
* Miners weak; Fresnillo down after Q4 update
* Kingfisher rallies as Exane ups target
By Jon Hopkins
LONDON, Jan 22 (Reuters) - Britain's leading share index eased a touch on Tuesday stalling after a recent push up to its highest level in four-and-a-half years, weighed by falls in financials and mining stocks.
Banks were the biggest sector fallers, knocking over 4 points off the FTSE 100, with traders citing profit-taking after recent gains, and caution over a report that several German banks had been asked to simulate a split of their investment banking operations.
Insurers were also weak, led by Standard Life, down 0.8 percent as UBS downgraded its rating to "sell" from "neutral" in a UK life and general insurance review.
UBS undertook the same downgrade on mid cap Phoenix Group , off 2.1 percent, citing valuation grounds for both.
"After strong share price performance in 2012, the (insurance) sector no longer offers such clear value, and fundamentals look challenging," UBS said in a note.
Among weaker miners, Mexican silver miner Fresnillo was the biggest FTSE 100 percentage faller, shedding 2.8 percent after a fourth-quarter production report, with some analysts citing concerns over the potential introduction of a mining royalty in Mexico.
"Perhaps it's that that's spooking investors," RBC analyst Jonathan Guy said, adding that the results were "decent."
At the close, the FTSE 100 index was down 1.81 points, or 0.03 percent at 6,179.17 points, retreating after having hit a fresh 2013 peak at 6,184.02 in early trade.
News of a move my Credit Suisse to reduce its strategy allocation in UK equities also weighed on the London market.
"The FTSE 100 is a defensive market by sector composition and thus tends to underperform when economic lead indicators and global equity markets rise," Credit Suisse said in a global strategy review.
But the Swiss bank retained its "overweight" stance on the London market, seeing opportunities in real estate stocks and cheap international earners, such as Smiths Group and Shire. Smiths added 1.7 percent, and Shire 0.8 percent.
Other stocks perceived as defensive provided the main underlying strength for the market, with drinks groups and food producers standing out.
Food ingredients group Tate & Lyle gained 1.5 percent with traders citing the impact of an upgrade in rating to "buy" from "hold" by Berenberg Bank, which said the stock is the most undervalued in its sector.
Retailer Kingfisher was a good FTSE 100 gainer, up 1.5 percent, rallying after recent falls supported by a 9 percent price target hike by Exane BNP Paribas to 350 pence, in an upbeat review of UK retailers, with the bank forecasting new share buy backs by the DIY stores group.
Kingfisher is scheduled to issue a trading update on Feb 21.
Exane also upgraded its rating for clothing retailer Next - which issued a positive trading update on Jan 3 - to "neutral" from "underperform" as the bank thinks its forecasts look well underpinned. Next added 1.5 percent.
"The outlook for UK consumers is slowly improving. Employment is growing, inflationary pressure easing and household savings rebuilding," Exane said in a note.
Online grocer Ocado was the top FTSE 350 riser, up 6.3 percent on news Stuart Rose, one of Britain's best-known retail bosses, will become its chairman for what some analysts see as a make-or-break expansion by the loss-making business.
Tom Ewing, portfolio manager of Fidelity UK Growth fund said: "The appointment of Sir Stuart Rose as Chairman is encouraging. It boosts the retail experience at the top of Ocado whilst demonstrating that key participants in the industry are waking up to the fact that people increasingly, and inexorably, want to shop for their food online." (Reporting by Jon Hopkins; editing by Ron Askew)