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* FTSE 100 down 0.3 pct
* Sainsbury's among top fallers after profit decline
* Materials, energy biggest sectoral weights
* Direct Line buoyed by solid update
MILAN, May 3 (Reuters) - Britain's top share index fell on Wednesday, weighed down by weaker commodity stocks, while supermarket Sainsbury's dropped after an underwhelming earnings update.
The blue chip FTSE 100 fell 0.2 percent at 7,235.60 points by 0916 GMT, broadly in line with slight losses seen elsewhere in Europe.
Sainsbury's was among the biggest blue chip fallers, down 1.9 percent, after the company reported a third straight year of underlying profit decline, despite the boost to earnings from last year's purchase of Argos, the general merchandise retailer.
"Not a great set of numbers from Sainsbury's this morning but largely in line with expectations," said Neil Wilson, senior market analyst at ETX Capital in London.
"While the core brand seems to be struggling and losing ground to rivals, recently-acquired Argos is delivering the top line growth that keeps the group above water," he added.
Sainsbury's, which trails market leader Tesco TSCO.L in annual sales, cautioned that it saw no let-up in the intensely competitive UK market any time soon.
Biggest sectoral weights to the FTSE were materials and energy, which wiped around 15 points off the index.
Heavyweight miners Glencore and BHP Billiton both dropped over 2 percent, after copper prices fell as the dollar ticked higher on expectations the Federal Reserve will signal a June rate rise later in the session.
BP was the biggest drag to the index with a 0.9 percent fall that following strong gains it made in the previous session following a better than expected earnings update.
Among the gainers was Direct Line, up 2.2 percent, after the motor and home insurer reported a 4.2 percent rise in gross written premiums in the first quarter, boosted by strong performance in its auto business.
British equities were little moved by data showing growth in the country's construction industry accelerated in April, adding to tentative signs that the economy might be recovering a little momentum after a lacklustre start to 2017.
British mid caps also continued to trade in the red and were down 0.7 percent.
But Mitie outperformed, up 8 percent, after the pest control company reported steady revenues and unveiled the results of a review of its accounts.
Construction group Galliford Try fell 9 percent after the company warned on charges for construction business.
Reporting by Danilo Masoni; Editing by Janet Lawrence