* Pressure on Barclays drags banking shares lower
*Energy stocks on the back foot as crude prices slip
* Sainsbury gain as Qatari interest resurfaces
By Harpreet Bhal
LONDON, Oct 20 (Reuters) - Britain's top shares fell 0.7 percent on Tuesday, led down by banks after Qatar sold shares in Barclays, while weaker-than-expected U.S. data added to the negative sentiment. The benchmark FTSE 100 closed down 38.14 points at 5,243.40, having hit a fresh high for the year at 5,298.54 earlier in the session.
Barclays fell 4.8 percent after news that the Qatari Investment Authority (QIA) would sell 379.2 million shares in the bank worth around 1.3 billion pounds.
Within the banking sector, HSBC, Royal Bank of Scotland and Lloyds Banking Group shed 0.7 to 2.2 percent.
The FTSE 100 has so far rebounded 52 percent since hitting a floor in March, and crossed the 5,200 level for the first time in more than a year last week on growing optimism on the outlook for corporate earnings.
With the quarterly reporting season under way in the U.S., analysts believe the UK index could be set for fresh highs if results continue to please. Earlier Caterpillar and Pfizer posted forecast-beating results.
"At the moment there seems little reason to worry about a sharp slide for the stock market and many are looking for the FTSE 100 to move through the 5,300 level in the next couple of days," said David Jones, chief market strategist at IG Index.
Shares were pressured by data showing new construction of U.S. homes rose by less than expected in September. Meanwhile a separate report which showed U.S producer prices dropped an unexpected 0.6 percent in September also added to negative sentiment.
Oil and gas producers were on the back foot as crude prices slipped from a 12-month high of $80.05 a barrel hit earlier in the session. BG Group, BP, Royal Dutch Shell and Tullow Oil were down between 0.1 and 0.9 percent.
Mining firms were also lower, with Eurasian Natural Resources, Fresnillo, Kazakhmys, Rio Tinto and Vedanta Resources losing 0.7 to 2.3 percent.
Xstrata dipped 2.4 percent as investors mulled third-quarter data showing the company produced more coal but lower ore grades that cut copper output.
Autonomy was the biggest blue-chip faller, down 8.7 percent, after the search software company posted quarterly results which saw margins fall to 86 percent from 92 percent a year ago due to costs associated with a new product launch.
SAINSBURY IN DEMAND
Sainsbury jumped 5.4 percent on renewed speculation the QIA was interested in making an offer for the supermarket after selling its stake in Barclays.
Peers WM Morrisson and Tesco were up 0.3 and 1.2 percent respectively.
Among other gainers, Pearson was up 4.4 percent after the publishing group raised its full-year guidance following a strong performance from its education business.
On the economic front data showed Britain's public finances suffered their worst six months on record between April and September, with government borrowing more than double its level a year ago but no worse than expected.
The Office for National Statistics said public sector net borrowings last month was 14.8 billion pounds, the biggest total ever recorded for a month of September. The year-to-date deficit swelled to 77.3 billion pounds, higher than in any comparable period since records began in 1946.