Oil firms, industrial metal miners drag down London's FTSE 100

By Pranav Kashyap

(Reuters) - Britain's benchmark index opened lower on Tuesday, dragged down by heavyweight oil stocks and industrial metal miners, while investors parsed through wage and employment data released earlier in the day.

The FTSE 100 was down 0.1% at 8,283.31 points by 0715 GMT, while the mid-cap index FTSE 250 ticked up 0.2%

Oil stocks lost 2.7% and the index was the biggest sectoral loser, after oil prices slid on the back of weaker demand outlook and after a media report said Israel is willing not to strike Iranian oil targets. [O/R]

Industrial metal miners shed 1.9% as copper prices were pressured by a firmer U.S. dollar and uncertainty about top consumer China's economic recovery. [MET/L]

Meanwhile, Britain's labour report revealed that the unemployment rate dropped to 4% in the three months through August, down from 4.1%. Analysts polled by Reuters expected the data to be unchanged.

However, wage growth in the UK slowed to its lowest pace in over two years during this period, and job vacancies continued to decline. These figures are likely to be welcomed by the Bank of England (BoE) as it considers when to cut interest rates again.

The further fall in wage growth, along with signs that the labour market continues to cool, support expectations that the BoE will cut interest rates at its policy meeting in November, Capital Economics said in a note.

Traders have priced in an 83% chance of a rate cut by the BoE at its next meeting.

Among stocks, Bellway rose to the top of the FTSE 250, up 6.9% after the homebuilder said it expects to build more homes in the 2025 financial year, buoyed by prospects of further reductions in borrowing costs.

The house-builders' sector led sectoral gains, up 2.9%

Paragon Banking Group lost 6.7% after Jefferies downgraded the stock to "hold" from "buy".

(Reporting by Pranav Kashyap in Bengaluru; Additional reporting by Shashwat Chauhan; Editing by Sonia Cheema)