* FTSE 100 down 0.2 pct

* Deutsche Bank (Xetra: DBK.DE – news) downgrade hits WM Morrison shares

* FTSE stalling after hitting highs last week

By Sudip Kar-Gupta

LONDON, May 21 (Reuters) – Britain’s top equity index stalled on Wednesday, losing steam after hitting its highest level in more than 14 years last week, while supermarket chain WM Morrison fell after a broker downgrade.

The blue-chip FTSE 100 index was down by 0.2 percent, or 10.02 points, at 6,791.98 points in mid-session trading.

WM Morrison was the worst-performing FTSE 100 stock in percentage terms, falling 2.3 percent after Deutsche Bank analysts cut their rating on the company to “sell” from “hold”, mainly on valuation grounds.

Last week the FTSE climbed to 6,894.88 points, which marked its highest level since December 1999, but it has since lost ground.

Traders said the fact that the FTSE had failed to break above the 6,900 point level had induced some investors to go “short” and sell out to book profits on last week’s run-up.

“We’re short on the FTSE,” said Darren Easton, director of trading at Logic Investments.

Peel Hunt equity strategist Ian Williams said better corporate results were needed to give the FTSE a fresh leg-up.

The FTSE 100 trades on a 12-month forward price/earnings ratio of 13.8 times, against its 10-year average of 11.7 times, Thomson Reuters Datastream shows.

“It feels like we’re somewhere around fair value – we’re still waiting for this improving earnings to filter through,” said Williams. (additional reporting by Tricia Wright; Editing by Toby Chopra)