* FTSE 100 flat at close, mid caps down 1.1 pct
* Gold, silver miners in demand, defensives rise
* ConvaTec drops after investors sell stake
* HSBC downgrade hits Burberry shares (Recasts, adds quote and detail)
By Kit Rees
LONDON, June 6 (Reuters) - UK shares remained stuck below last week’s record high on Tuesday as investors sought safety in precious metals miners and defensives ahead of Thursday’s general election, while British mid caps dropped close to a three-week low.
The blue chip FTSE 100 closed flat in percentage terms, while the more domestically-exposed mid cap index dropped more than 1 percent, its biggest one-day loss in two months.
While large caps spent the majority of the trading session in negative territory, a dip in the British pound helped the blue chip index end broadly unchanged.
“The direct impacts (from this election) are currency, very important especially for the FTSE 100 given how international it is,” Caroline Simmons, deputy head of the UK investment office at UBS Wealth Management, said.
”This time we’ve got a focus on corporate tax rates given what’s in the Labour manifesto, and personal income taxes and whether that would affect the consumption patterns for UK-listed companies.”
Investors instead sought refuge in precious metals miners Fresnillo and Randgold Resources, which gained 3.2 percent and 2.7 percent respectively, while more defensive plays such as consumer goods maker Reckitt Benckiser and British American Tobacco were also in demand.
Miners followed suit, reversing earlier losses as the pressure eased on the price of copper, which traded flat. Anglo American, Antofagasta and BHP Billiton were all up between 1.2 percent and 1.9 percent.
Medical technology firm ConvaTec was the biggest individual faller, however, down 4 percent after two investors sold a higher stake via a placing.
Luxury goods firm Burberry was also down 3.7 percent after HSBC cut its rating on the stock to “reduce” from “hold”, citing a lack of visibility on the top line.
“Every shareholder-friendly initiative seems to have been looked at to enable Burberry shares to be protected in the absence of what, in our view, would be the only real solid booster: a sustainable rebound in sales growth,” analysts at HSBC said in a note.
Falls among mid caps were fairly broad-based, with outsourcer Capita, oilfield services provider Petrofac and support services firm Carillion all down more than 4.6 percent.
AO World was the biggest mid-cap faller, dropping 10.7 percent and hitting its lowest level since July 2016 after the online retailer warned of a significant slowdown in UK sales growth in the first quarter. (Reporting by Kit Rees, editing by Pritha Sarkar and Susan Thomas)