* Banks retreat after strength last week
* Miners hit by falling metal prices
* Property stocks weighed by JP Morgan downgrades
* Results, UK budget in focus
By Simon Falush
LONDON, April 20 (Reuters) - Britain's leading shares fell
1.1 percent by mid-session on Monday as banks retreated from
sharp gains last week and miners fell on the back of weaker
metal prices.
However, moves were relatively muted ahead of uncertain
corporate results due later in the week and the UK budget on
Wednesday.
By 1035 GMT, the FTSE 100 <> was down 45.43 points at
4,047.27, after closing 39.82 points higher on Friday, which
contributed to a 2.6 percent gain over the shortened trading
week after Easter.
The index is down 8.7 percent this year but has gained 17
percent since its low set in March.
Investor nervousness returned ahead of the budget and
results from UK stocks including Tesco <TSCO.L> and
GlaxoSmithKline <GSK.L> and U.S. companies, including IBM
<IBM.N>, Bank of America <BVAC.N> and MacDonalds <MCD.N> this
week.
"We've had six weeks of rallying markets on improved
confidence, but while the reporting season has been better than
expected, the results are still very poor indeed" said Henk
Potts, markets strategist at Barclays Wealth.
"There are still a lot of hurdles to overcome and volatility
is still going to be a significant aspect."
Miners fell, tracking lower metal prices. Rio Tinto <RIO.L>,
Kazakhmys <KAZ.L>, Eurasian Natural Resources <ENRC.L>, Anglo
American <AAL.L>, Lonmin <LMI.L> and BHP Billiton <BLT.L> fell
between 2.2 percent and 6.9 percent.
Heavyweight energy stocks were higher, though crude prices
fell to below $49 per barrel <CLc1>.
BP <BP.L> and Royal Dutch Shell <RDSa.L> added 0.5 percent
and 2 percent respectively, but BG Group <BG.L>, Tullow Oil
<TLW.L> and Cairn Energy <CNE.L> fell between 1.7 percent and
3.2 percent.
DARLING ADMISSION
British Finance Minister Alistair Darling is set to admit
for the first time that the government will not recoup the full
cost of its bailout of the banking sector and that the bill
could be as much as 60 billion pounds, The Financial Times said
on Monday.
Darling will also demand public sector spending cuts worth
15 billion pounds ($22 billion) in his budget on Wednesday, the
Times newspaper reported on Monday. []
Banks took the most points off the index, retreating after a
strong week, with Barclays <BARC.L>, HSBC <HSBA.L> and Standard
Chartered <STAN.L> falling between 3.1 percent and 6.1 percent.
Royal Bank of Scotland <RBS.L> and Lloyds Banking Group <LLOY.L>
both gained 4.3 percent.
The Confederation of British Industry (CBI) said in its
latest economic forecasts on Monday that Britian has been
through the worst of the recession and will return to to modest
growth in the second half of 2010. []
Asking prices for homes in England and Wales fell an annual
7.3 percent in April, the smallest drop since January, property
website Rightmove said on Monday. []
The April figure follows an annual drop of 9 percent in
March and adds to evidence that the pace of house price falls
may be starting to moderate as the flow of credit picks up after
coming to avirtual standstill last year.
Property companies were weaker after JP Morgan revised its
ratings on the European property sector.
Hammerson <HMSO.L> fell 4.8 percent after it was cut to
"neutral" from "overweight" and Liberty International <LII.L>
lost 5.2 percent after it was cut to "underweight" from
"neutral".
Thomas Cook <TCG.L> was among the heaviest fallers, down 9
percent after the travel company's German shareholder, Arcandor,
<AROG.DE> announced details of a restructuring plan, dashing
hopes for any possible sale of its stake in the UK-listed firm.
[]
For a timeline on the run-up to the UK budget, please click
on
http://uk.reuters.com//news/globalcoverage/timelines/timeline?tx=20090416145359.xml&tn=Alistair%20Darling%20presents%20key%20budget (Editing by Karen Foster)
