By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- U.K.'s FTSE 100 index extended losses into a third straight week on Monday as mining firms tracked most metals prices lower and Vodafone Group PLC declined after news it settled a tax dispute.

The benchmark index dropped 0.5% to close at 6,465.73, after closing down for two consecutive weeks on Friday.

Shares of Glencore Xstrata PLC (GLCNF) gave up 2.1% after reports said the resource giant is expected to write down the value of assets from Xstrata, which it acquired in the spring. A representative from the firm declined to comment. Glencore Xstrata reports first-half earnings on Tuesday.

Other mining firms were also on the decline, as metals prices dropped. Shares of Anglo American PLC fell 3.6%, Vedanta Resources PLC shaved off 2.8%, and BHP Billiton PLC lost 1.6%.

Also among notable decliners in London, shares of telecom giant Vodafone (VOD) dropped 1.3% after it was revealed the firm made a multimillion-pound payment to British tax authorities to end a dispute over an Irish subsidiary, according to a Guardian report.

"The settlement with HMRC related to a number of technical factors regarding inter-Group transfer-pricing arrangements," Vodafone said in a statement.

Banks were further on the decline, as Standard & Poor's Ratings Services said revenue growth for the sector in the U.K. is likely to "remain subdued despite signs of economic growth in the U.K."

"U.K. banks continue to grapple with the evolving regulatory landscape, stricter capital standards, and the continued drag on organic capital build from exceptional items. These developments have done little to diminish our negative view of industrywide risks in the U.K. banking sector," S&P said.

Shares of HSBC Holdings PLC (HBC) dropped 1.1%, Lloyds Banking Group PLC (LYG) fell 1.8% and Royal Bank of Scotland Group PLC (RBS) lost 0.9%.

On a more upbeat note in London, shares of Shire PLC gained 1% after the Sunday Times reported that the pharmaceutical company hired Lazard to advise on a possible takeover attempt by a U.S. rival.

Outside the major index, Kentz Corp. Ltd. soared 24% after the engineering firm rejected takeover offers from AMEC PLC and M+W Group.

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