* FTSE falls, pausing after Friday's 2009 highs
* Banks lower; Lloyds rights issue rumours sour sector
* Miners hit hardest as profit takers move in
* Energy stocks under pressure as crude slips below $71
By Tricia Wright
LONDON, Aug 10 (Reuters) - Britain's top share index was lower in midday trade on Monday as investors booked profits as the earnings season tailed off, with heavyweight miners, banks and oils the biggest drags on the blue chips.
At 1042 GMT, the FTSE 100 was down 27.11 points. or 0.6 percent, at 4,704.45, after hitting a 10-month closing high on Friday, up 0.9 percent, or 41.03 points, at 4,731.56, following upbeat employment data in the U.S.
"In terms of the corporate side, what we're seeing is a bit of a wind down now from the second-quarter earnings we've been seeing in the UK," said Richard Hunter, head of UK equities at Hargreaves Lansdown.
"Although it's been pretty good on the whole, obviously it now leaves a bit of a gap in terms of where the market looks for the next direction," he said.
Miners were the biggest drag on the FTSE 100 index, falling back after a recent rally, with Anglo American, Fresnillo, BHP Billiton and Antofagasta off 1.2-2.3 percent.
Rio Tinto dropped 1.7 percent after China stepped up espionage allegations against the world's second-largest iron ore miner.
Xstrata fell 2.5 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.
Energy stocks were weaker as crude prices dipped below $71 a barrel, losing momentum after last week's rally as traders focused on swollen inventories and prospects for a stronger dollar.
BG Group, Royal Dutch Shell and Cairn Energy fell 0.4-0.7 percent.
Banks were under pressure as sector sentiment took a dive following a report in the Sunday Times about a possible share issue by Lloyds Banking Group, which fell 4.1 percent.
Royal Bank of Scotland, was the biggest blue-chip faller, down 4.9 percent after its glum results on Friday, with Barclays and Standard Chartered off 0.8 percent and 0.3 percent, respectively.
INSURERS IN DEMAND
Life insurers were in demand, with Friends Provident topping the FTSE 100 leaderboard, up 7.1 percent, after the firm said on Monday it had agreed to fresh talks with suitor Resolution. Investors were hoping that an agreed offer could land with Friends Provident's interims on Tuesday.
Peer Prudential climbed 2.2 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 rose 1.3 percent, while Standard Life added 0.3 percent.
Rexam rose 2.3 percent as Credit Suisse raised its recommendation to "outperform" from "neutral" and lifted its target price to 300 pence from 278 pence.
And BT Group added 1.9 percent as JP Morgan raised its rating for the fixed line telecoms group to "overweight" from "neutral".
(Editing by Gilbert Kreijger)