(Corrects paragraph two to say down 44.4 points and not 44.4
percent)
* FTSE 100 down 1.1 pct at midday
* Oils weigh down index as crude price sags
* U.S. jobs data in focus at 1330 GMT
By Nicholas Vinocur
LONDON, Dec 5 (Reuters) - Britain's top share index fell
1.1 percent by midday on Friday, with oils and miners leading
the fall on weakening global demand for commodities while
investors focused their attention a key U.S. jobs report.
At 1211 GMT, the FTSE 100 <> was down 44.4 points at
4,119.23, having closed down 0.2 percent on Thursday after the
Bank of England cut interest rates by a full percentage point.
Heavyweight energy shares weighed most on the index, as
crude prices crept up to $44.26 <CLc1> but languished near their
lowest level in nearly four years seen on Thursday.
BP <BP.L> fell 4.8 percent, BG Group <BG.L> lost 4.5
percent, while Royal Dutch Shell <RDSa.L> shed 4 percent and
Tullow Oil <TLW.L> dropped 5.3 percent.
Miners also suffered following a dip in base metals prices
with copper hitting a 3-1/2 year low.
BHP Billiton <BLT.L>, Vedanta Resources <VED.L>, Kazakhmys
<KAZ.L>, Antofagasta <ANTO.L> and Xstrata <XTA.L> fell between
4.3 and 9.4 percent.
Utility stocks, usually seen as defensive, also lost
ground, with Goldman Sachs downgrading the sector to
"underweight" from "neutral". National Grid <NG.L> and Drax
Group fell 0.6 and 1.3 percent respectively.
After cutting interest rates to 2 percent -- their lowest
level since 1951 -- the BoE is working on a radical plan to
inject cash directly into the British economy as a last resort
to reverse a slide into recession, the Daily Telegraph reported
on Thursday. []
Thursday's rate cut had little immediate effect on the UK
stock market, however, and it is unlikely to do so for at least
another year and a half, analysts said.
"Clearly, monetary policy works with considerable lags, so
the actions of the BoE yesterday will not have a material effect
until 18 months down the line. To expect that the base rate
reduction will have a sudden effect is too optimistic," said
Edward Menashy, an economist at brokerage Charles Stanley.
PAYROLLS EYED
Investors will rather focus on U.S. non-farm payrolls data,
due at 1330 GMT, as more job losses could delay the recovery of
the U.S. housing market and push the world's largest economy
deeper into recession, he said.
"The economy cannot recover without a recovery in the
financial sector; the financial sector cannot recover without
stabilization in the property market, and the property market,
in turn, depends on the employment situation," Menashy said.
Economists in a Reuters survey forecast 340,000 jobs were
lost in the month compared with a loss of 240,000 jobs in
October.
Banks were generally softer, with the FTSE 350 banks index
<.FTNMX8350> down 0.2 percent.
Royal Bank of Scotland <RBS.L>, HBOS <HBOS.L> and Standard
Chartered <STAN.L> fell between 1.8 and 4.3 percent. But HSBC
<HSBA.L> and Lloyds TSB <LLOY.L> were in positive territory.
Private equity group 3i <III.L> retreated 4.9 percent,
extending the previous session's losses nearly 9 percent after
it said it was to reduce its headcount by about 15 percent in
response to toughening market conditions.
The dire outlook for the financial sector boosted demand for
defensive drugmakers, with GlaxoSmithKline <GSK.L> and Shire
<SHP.L> up between 2.4 and 4.7 percent.
Selected retailers also rallied as the holiday buying season
gathered steam, with J Sainsbury <SBRY.L>, Morrison Supermarket
<MRW.L> and Tesco <TSCO.L> all up between 1.7 and 3.6 percent.
(Editing by David Holmes)
