* FTSE down 1 percent
* Equities good long term bet - analysts
* Banks, insurers fall as Europe's debt worries resurface
By David Brett
LONDON, April 18 (Reuters) - Europe's debt crisis weighed on financial stocks on Monday, dragging Britain's top share index lower, while analysts said short-term macro pressures present an attractive longer-term buying opportunities on the FTSE.
Greek, Spanish and Portuguese bond yields widened on concerns that Greece will eventually need to restructure its debt, while Moody's cut its debt ratings on Irish banks.
Adding to worries, Finland's True Finns anti-euro party, which was voted into a powerful role in the Helsinki parliament at the weekend, said it expected the European Union to change plans for a bailout of Portugal.
Barclays fell 2.4 percent ahead of Citigroup's results while insurer Resolution fell 3.9 percent as UBS cut its rating for the closed-book life insurer to "neutral" from "buy", on outlook concerns and strong recent share price performance.
By 1039 GMT, the FTSE 100 was down 60.52 points, or 1 percent, at 5,935.49, having closed up 0.5 percent at 5,996.01 on Friday.
A technical analyst at Charles Stanley said although the latest price action gave the impression that the index has entered a holding pattern, upside momentum remained.
"As with the U.S. markets, the longer-term (i.e. weekly) chart shows that the uptrend that began in 2009 is still ongoing and that means that it is still right to be long of UK equities," the analyst said.
OPTIMISTIC OUTLOOK
In strategy notes, investors remained upbeat on equities despite the FTSE stagnating, up just 0.5 percent in April.
"Taking a position on the Footsie is a play on global economic growth, which should remain above 4 percent in 2011," SocGen analysts said in a cross-asset research note, in which they suggest going long the FTSE.
JPMorgan analysts said that while concerns over stagflation and U.S. earnings exist, medium term equity returns are expected to outstrip those of bonds.
"There is a strong consensus on the risk trade, with a clear majority being long equities, short bonds and short Japanese yen."
On the upside, Europe's biggest home improvement retailer Kingfisher climbed 1.4 percent, with traders citing an upgrade by Bank of America Merrill Lynch as a major catalyst.
ITV, whose shares have been hit by concerns over its 2011 advertising revenues, added 1.8 percent as Jeffries upgraded its recommendation to "hold" from "underperform".
ITV's shares have traded below their 20-day moving average since March 14, with their 14-day relative strength index at around 35, close to the 30 point oversold level.
Bwin Party Digital rocketed 36 percent, among many European gaming firms which rose after the websites of some U.S. poker operators were shut down by the U.S. government after charges of illegal gambling, money laundering and fraud, potentially providing opportunities for European companies.
Inflationary pressures weighed on commodity stocks, after China raised banks' reserve requirements on Sunday for the fourth time this year, to keep its overheating economy in check.
U.S. Brent crude slipped below $123 as fears that high prices would dampen demand overrode concerns over a cut in oil output from top oil exporter Saudi Arabia.
Explorer Tullow Oil, which was down 1.1 percent, has sued its former partner in Uganda, Heritage Oil,which was off 3.2 percent, to recover $313 million which Tullow paid to cover tax on fields it bought from Heritage.
British orthopaedics company Smith & Nephew fell 4.9 percent after Swiss medical device maker Synthes said it was in merger talks with Johnson & Johnson, which poured cold water on speculation that J&J was targeting the British firm. (Editing by David Cowell)