UK stocks decline as oil tops $100, fuels inflation fears

Sept 9 (Reuters) - London's FTSE 100 hit its lowest in near a week on Wednesday as oil rallied to above $100 a barrel, renewing inflation worries and dampening risk appetite, in a week of highly-anticipated economic data reports. 

The blue-chip FTSE 100 index fell 0.42% to 10,766.61 points by 0925 GMT, while the midcap FTSE 250 slipped 0.29%.

• Benchmark Brent crude oil futures rose past $100 a barrel, breaching the symbolic barrier for the first time since July 24 as U.S. and Iran both struck vessels, escalating the ongoing conflict. [O/R]

• Oil majors in the UK advanced, with BP and Shell rising 1.5% and 1% respectively, with energy stocks hitting a more than four-month high.

• Heavyweight banks were the biggest drag, with HSBC down 1.2%, Barclays off 1.6% and Lloyd Banking sliding 1.3%.

• "Brent crude pushing above $100 a barrel has had a psychological effect on the market, pushing a hypothetical inflation worry gauge to ‘serious’ status and dragging down financial assets," said Dan Coatsworth, head of markets at AJ Bell.

• Investors are closely watching a key U.S. inflation report and economic growth data in the UK this week, that could influence interest rate expectations from central banks.

• Markets are pricing in a 60% chance the U.S. Federal Reserve will hike rates next week but widely expect the Bank of England to stand pat on rates, per LSEG data.

• Among stocks, Burberry slipped 2.4% after HSBC downgraded the stock to "hold" from "buy". It weighed down the personal goods sector.

• Asset manager Aberdeen rose 2.2% after naming Torbjörn Magnusson, the former chief executive of Nordic insurance giant Sampo, as its chair-designate and non-executive director.

• Among the midcaps, polymer maker Victrex topped the index with a 14.7% rise after raising its annual underlying profit before tax forecast.

• Eastern Mediterranean-focused gas producer Energean rose 3.9% after posting a 45% jump in first-half profit.

(Reporting by Anand Gopal and Purvi Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee)