* FTSE 100 ends down 0.35 pct
* Bellway update boosts housebuilders
* easyJet rises after upgrade
* Banks, GKN, Ashtead among fallers (Adds details, closing prices)
By Kit Rees and Danilo Masoni
LONDON, June 14 (Reuters) - Britain’s top share index ended lower on Wednesday, paring earlier gains as a late drop in crude prices hit oil stocks, more than offsetting gains in housebuilders following a well-received update from Bellway .
Britain’s blue chip FTSE 100 index fell 0.35 percent, while the mid caps managed to end in positive territory, up 0.58 percent.
Housebuilders had suffered a selloff in the immediate aftermath of the UK’s general election, which resulted in a hung parliament, but a trading update from Bellway eased investors’ concerns as the firm said demand had not slowed in the run-up to the election.
“Housebuilders generally ... have been marked down because of fears over the UK economy, the UK property market, but actually the numbers that are coming out of these companies are still pretty reassuring,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
“There are a number of tailwinds that (the housebuilders) also have, one of which is extremely low interest rates, another of which is the chronic lack of housing in this country, and a third thing is the government help-to-buy scheme,” Khalaf added.
Bellway’s shares rose 5.9 percent to a record high, while blue chip peers Barratt Developments, Persimmon and Taylor Wimpey were among the top FTSE gainers, up between 1.3 percent to 3.2 percent.
But a fall in crude oil prices, following reports showing that U.S. crude inventories were still increasing, weighed on energy stocks, which took most points off the FTSE. Shares in BP and Royal Dutch Shell fell 1.8 and 1.3 percent respectively.
Miners were also lower, with Anglo American and Glencore both down more than 2.5 percent.
Mid-cap Acacia Mining bucked the weaker trend, up 7.9 percent, rallying after news that the gold miner and Tanzania had agreed to talks to try to settle a festering dispute over taxes, royalties and exports.
British large-caps had earlier benefited after sterling weakened following UK data showing that earnings after inflation had contracted at the fastest pace since 2014, highlighting the growing post-Brexit strain on households. But the pound later reversed losses following a weak set of economic data in the U.S.
Among individual stock movers, budget airline easyJet rose 1.5 percent after Davy Research upgraded the stock to “neutral” from “underperform”, citing its higher operating leverage in the current environment.
“We believe that the European low-cost carriers will continue to see improving pricing trends as we approach peak summer, albeit a consensus among the airlines has yet to form on whether pricing will be positive or negative,” analysts at Davy said in a note.
Among the fallers were banks Lloyds and Standard Chartered, while equipment hire firm Ashtead dropped 1.4 percent, extending losses from the previous session after its earnings update.
“Strong results, but no consensus upgrades, saw a muted investor reaction and we see more downside from here,” analysts at UBS said, adding that accelerating competition and slowing end markets this summer could leave Ashtead’s valuation exposed.
Likewise, shares in engineering group GKN also came under pressure after Panmure cut its rating to “sell” from “hold”, on the back of challenges in the U.S. auto and Middle East aircraft markets. (Reporting by Kit Rees and Danilo Masoni; Editing by Keith Weir)