* FTSE down 1.1 percent; Greece debt problems overshadow
* Miners, oils fade; weaker commodity prices
* Interest rate decisions in UK and Europe awaited
By David Brett
LONDON, April 8 (Reuters) - Britain's top shares shed 1.1
percent near midday on Thursday, with miners and oils weighed by
falling commodity prices as Greek debt woes returned, and ahead
of interest rate decisions in the UK and Europe.
By 1013 GMT the FTSE 100 <> was down 65.65 points at
5,696.41 after it fell 18.29 points on Wednesday. The blue chips
are up 5.3 percent in 2010.
Miners were the biggest drag on the index, as commodity
prices retreated across the board as the demand outlook clouded
over.
Rio Tinto <RIO.L>, Xstrata <XTA.L>, Lonmin <LMI.L>, Anglo
American <AAL.L>, Kazakhmys <KAZ.L> and BHP Billiton <BLT.L>
fell 2 to 4.1 percent.
Investor confidence has been knocked by continuing anxiety
over Greek debt problems, causing the FTSE 100 to retreat from a
21-month high set on Tuesday.
"With Greek debt issues still ongoing, traders could
rightfully become nervous around their exposure," said Anthony
Grech, market strategist at IG Index.
The cost to insure Greece's debt against default rose on
Wednesday to a level higher than for Iceland's debt for the
first time since 2005 amid scepticism over Greece's ability and
willingness to fund its obligations. []
Energy stocks were weighed by weaker crude <CLc1> which fell
back for a second day after recent strong gains as the dollar
rose and higher stockpiles.
BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L>,
Tullow Oil <TLW.L> and Cairn Energy <CNE.L> fell 0.2-1.9 percent.
Enquest <ENQ.L>, which started trading on Tuesday following
its demerger from oil services firm Petrofac <PFC.L>, shed 3.1
percent. Indexes provider FTSE has confirmed its deletion from
the index with effect from the start of trading on Friday, April
9.
Risk sensitive bank stocks also fell. Barclays <BARC.L>,
Standard Chartered <STAN.L>, Royal Bank of Scotland <RBS.L> and
Lloyds Banking Group <LLOY.L> fell 1.7-2.3 percent.
RATE DECISION DRAWS INTEREST
Economists expect the Bank of England to keep interest rates
at 0.5 percent and not to add to the 200 billion pounds of asset
purchases made under its quantitative easing programme, as
inflation eased in line with central bank forecasts this month
and growth remains uncertain.
The pace of future fiscal tightening is also unclear with
the British election set for May 6 and no party clearly in the
lead.
The European Central Bank, meanwhile is expected to keep
euro zone interest rates at a record low of 1.0 percent.
[].
Upbeat UK industrial output data, which rose twice as fast
as expected in February, did little to boost investor sentiment.
[]
Among a handful of gainers was British Airways <BAY.L>, up
0.2 percent after the UK carrier and Spain's Iberia <IBLA.MC>
signed an $8 billion merger to create the world's third largest
airline by revenue, bringing a tie-up with American Airlines
<AMR.N> a step closer.
After the interest rate decisions, investors will focus on
the latest weekly U.S. jobless claims, due out at 1230 GMT, to
provide a further snapshot of the unemployment picture across
the Atlantic.
(Editing by Mike Nesbit)
