* FTSE pauses after Friday's 10-month high
* Lloyds rights issue report pressures banks
* Miners lower after succumbing to profit takers
By Harpreet Bhal
LONDON, Aug 10 (Reuters) - Britain's top share index edged down on Monday pressured by miners and banks, with investors booking profits from hefty gains last week, while the market searched for direction as the earnings season tailed off.
The FTSE 100 ended down 0.2 percent, or 9.36 points at 4,722.20, not far from a 10-month closing high of 4,731.56 on Friday after reassuring non-farm payrolls numbers from the United States boosted investor sentiment.
A recovery in corporate earnings and improving macroeconomic data has fuelled a rally in British stocks over the past few weeks, with the index rebounding 36 percent since the all-time low in March, and has gained 2.5 percent so far this month.
"It is a small pause after the push up last week. Everyone is having a look to see whether it can continue after the big numbers on Friday. It will be a very interesting week whether it can hold on (to recent gains)," said Richard Griffiths, senior trader at Spreadex Ltd.
Miners were the biggest drag on the index, with Anglo American, Fresnillo, BHP Billiton, Kazakhmys and Eurasian Natural Resources off 2-4 percent.
Rio Tinto shed 3.2 percent after China stepped up espionage allegations against the world's second-largest iron ore miner.
Xstrata lost 3.1 percent after the company said on Sunday it was in talks that could lead to it selling a major stake in a South African mining project.
Banks were also under pressure after investor confidence was dented by a report in the Sunday Times about a possible share issue by Lloyds Banking Group. The lender was the biggest blue-chip faller, losing 4 percent.
Royal Bank of Scotland was off 3.6 percent after its glum results on Friday and Barclays lost 1.8 percent. Standard Chartered and HSBC rose 0.6 and 0.3 percent respectively.
ENERGY PRICES CLIMB
Oil majors were higher as crude prices climbed above $71 a barrel. BP and Tullow Oil climbed 1 and 1.5 percent, but Royal Dutch Shell fell 0.4 percent.
Friends Provident rose 7 percent to top the gainers list, after the firm said it had agreed to fresh talks with Resolution . Sources said an agreement could be announced as early as Tuesday, when Friends reports first-half earnings.
Peer Prudential climbed 3 percent, helped by weekend newspaper reports that the company is set to buck the sector trend and raise its dividend with its results on Thursday.
Old Mutual, Standard Life and Legal & General were between 0.6 and 1.6 percent higher.
Drugmakers were in favour, reflecting a retreat in risk appetite, as investors opted for assets perceived as safe bets. GlaxoSmithKline added 1.2 percent, while Shire was up 1 percent. AstraZeneca was 0.2 percent lower.
Rexam rose 2.8 percent as Credit Suisse raised its recommendation to "outperform" from "neutral" and lifted its target price to 300 pence from 278 pence.
BT Group was up 2 percent after JPMorgan raised its rating for the fixed line telecoms group to "overweight" from "neutral".
In economic news, a survey showed British firms had an easier time getting credit in the last three months -- the first improvement this year -- and access to credit is seen getting even better in the next three months.
Investors will be focused on the Federal Reserve's statement on Wednesday at the end of its two-day interest rate setting meeting.
The central bank is expected to hold rates near zero and investors will be looking for signals of an exit strategy from its efforts to prop up the financial system. (Editing by Jon Loades-Carter)