* FTSE 100 index down 0.4 percent
* Oils, miners retreat after early rally
* Banks higher after Ireland bail-out finalised
By Jon Hopkins
LONDON, Nov 29 (Reuters) - Britain's leading shares were lower around midday on Monday as commodity issues retreated, although banks held firm after Ireland's financial bailout was finally agreed at the weekend.
At 1159 GMT, the FTSE 100 was down 20.22 points, or 0.4 percent, at 5,648.48 falling back after earlier reaching a session peak of 5,722.70.
"The initial euphoria on the Irish bailout soon disappeared although there are still some decent gains around in the banks," said David Morrison, market strategist at GFT Global.
"There does seem to be some shifting sentiment as large concerns remain over whether the Irish bailout will work, and as the spotlight just shifts back to Spain and Portugal."
Integrated oil stocks were the biggest drag on the blue-chips, although crude held firm, with BG Group down 0.9 percent and Royal Dutch Shell off 0.4 percent.
BP fell 0.7 percent. The firm has agreed to sell its stake in Argentina-based oil and gas group Pan American Energy to Bridas Corp for $7 billion.
Oil services firm Petrofac was the top individual blue-chip faller, down 2.8 percent, while oil explorer Cairn Energy shed 2.8 percent.
India's Oil Secretary S. Sundareshan on Monday said a decision on Cairn's application to transfer majority stakes in its Indian assets to Vedanta Resources, down 1.1 percent, will be taken before end-February..
Other miners fell, with Rio Tinto down 0.2 percent, as metal prices saw earlier gains eroded, with copper only up 0.1 percent.
But African Barrick Gold held firm, up 1.3 percent, after the firm found more gold at the Nyanzaga project.
Resolution fell 2.5 percent after JPMorgan Cazenove started coverage of the insurance buyout specialist with an "underweight" rating, saying while the stock is undervalued, it sees "better value elsewhere in UK Life".
BANKS BOUNCE
Banks were the biggest blue-chip gainers, led by global giant HSBC, up 1.8 percent, and Royal Bank of Scotland ahead 1.1 percent, as concerns over lenders' exposure to European debt faded after a bailout for Ireland was finally agreed.
EU finance ministers on Sunday endorsed an 85 billion euro ($115 billion) loan package to help Ireland cover the country's bad bank debts and bridge its budget deficit, and approved the outlines of a permanent crisis-resolution system.
But Barclays missed out on the rally, slipping back 0.1 percent.
Bob Diamond, Barclays's chief executive designate, is spearheading a strategic review of 50 to 60 of the bank's key divisions to determine if underperforming units can demonstrate clear growth potential, The Sunday Times said.
The number of mortgage approvals in Britain fell to its lowest in eight months in October, but mortgage lending rose twice as fast as expected, official data showed on Monday, the Bank of England said.
Further clues as to the health of the domestic economy will come with the Office for Budget Responsibility's autumn forecast, due to published at 1230 GMT.
(Editing by Erica Billingham)