* FTSE down 0.8 pct; UK, EU data add to U.S. woe
* Banks, commodity stocks lead fallers, risk appetite fades
* Oils services higher, supported by bullish broker note
By David Brett
LONDON, Sept 23 (Reuters) - Britain's top share index fell
by midday on Thursday as banks and commodities led a broad-based
sell-off, with sentiment blighted by persistent concerns over
the health of the global economic recovery.
By 1035 GMT, the FTSE 100 <> was down 41.53 points or
0.8 percent at 5,510.38, having ended down 0.4 percent at
5,551.91 on Wednesday, its second consecutive session of losses.
"FTSE has outperformed Europe recently, and most European
markets are looking high on the technicals, so we may be looking
for a bit of a pull-back," said Jimmy Yates, head of equities at
CMC Markets.
He said the FTSE decline stopped at 5,480 on the December
future, "which is a decent support level. A break below this
should start another decent move down."
Banks were the biggest fallers. Lloyds Banking Group
<LLOY.L> and Royal Bank of Scotland <RBS.L> were off 2.0 and 0.5
percent respectively, as uncertainty over what steps governments
will need to sustain the economic recovery weighed on equities.
Debate on the Bank of England's Monetary Policy Committee is
in a particularly aggressive and vigorous phase as policymakers
struggle to assess the relative strength of upside and downside
risks to inflation, BoE Chief Economist Spencer Dale said on
Wednesday. []
UK mortgage approvals hit their lowest level since April
2009, data from major British banks showed, suggesting the
market will stay weak. []
Investors fretted about Europe's economy after data showed
the pace of growth in the euro zone's services and manufacturing
sectors slowed more than expected this month.
Wall Street futures pointed to a lower open ahead of the
release of weekly initial jobless claims, existing home sales
for August and leading economic indicators for August. []
RUNNING OUT OF STEAM?
Despite the recent retreat, the FTSE 100 remains up around
400 points since its late September low of 5,109.40, and 700
points higher than its 2010 low in early July.
"Technical factors ensure equities are supported even if
like Wile E. Coyote they are pedaling furiously in mid-air
having run of the end of a cliff," Jeremy Batstone-Carr, head of
research at Charles Stanley, said.
"It is likely that we will see clearer signs of how the
market is interpreting the (U.S. manufacturing) data as it comes
out over the next week or so through the currency, bond and
commodity markets."
Gold <XAU=>, base metal and crude oil <CLc1> prices extended
recent gains as the prospect of extensions to quantitative
easing programmes in the United States and the UK fuelled demand
for commodities, while the dollar retreated.
However, commodity-linked equities failed to hold onto early
gains as investors' risk appetite faded. Miners Kazakhmys
<KAZ.L> and Antofagasta <ANTO.L> fell 2.2 and 1.4 percent
respectively, while oil major BP <BP.L> shed 0.5 percent.
On the upside, however, oil services stocks were firmer,
supported by a bullish note from JP Morgan Cazenove, which said
it sees signs of a broad and sustainable earnings upgrade trend
for pan-European oilfield services.
Amec <AMEC.L> rose 1.1 percent and Petrofac <PFC.L> gained
0.4 percent.
Elsewhere on the downside, Shire <SHP.L> and AstraZeneca
<AZN.L> each dropped 1.6 percent after Exane BNP Paribas cut its
respective ratings on both the drugmakers.
(Editing by Michael Shields)
