* Banks shed Tuesday's gains; KPMG survey cautious
* Miners, oils fall with weak commodity prices
* Surprise BoE MPC split vote fails to impact
By Jon Hopkins
LONDON, Aug 19 (Reuters) - Britain's leading share index was
0.8 percent lower at midday on Wednesday, dragged down by falls
in heavyweight banks, miners and oils as investors turned risk
averse once more, with defensive sectors benefitting.
By 1053 GMT, the FTSE 100 index <> was 38.31 points
lower at 4,647.47, after closing 40.77 points higher on Tuesday.
The blue-chip index has rebounded 35 percent since hitting a
year low in March.
"Obviously with the strong gains last month and a fairly
steady (performance) last week people were expecting a bit of
pullback, particularly with volumes very low," said Omer Bhatti,
head of sales for World Spreads.
"Volumes are down by about 30 percent over the summer, and
the summer came early this year ... and pension funds are
unlikely to come in at current levels with the market looking
overbought," Bhatti added.
Banks took the most points off the index, as the appetite
for risk again reversed. HSBC <HSBA.L>, buoyed on Tuesday by a
Goldman Sachs upgrade, lost 3.3 percent, while Barclays
<BARC.L>, Lloyds Banking Group <LLOY.L>, Royal Bank of Scotland
<RBS.L> and Standard Chartered <STAN.L> shed 0.1 to 2.6 percent.
The sector was not helped by a survey from accountants KPMG,
which found Britain's banks are likely to see their battered
retail arms slide to a loss in the second half of 2009, as the
cost of bad loans, tough competition and wholesale funding
continues to weigh. []
Commodity issues also fell back as raw material prices
retreated on demand concerns due to doubts over the pace and
extent of economic recovery.
Oil majors dropped as crude prices retreated back below $69
a barrel <CLc1>. Royal Dutch Shell <RDSa.L>, BG Group <BG.L>, BP
<BP.L>, Cairn Energy <CNE.L> and Tullow Oil <TLW.L> fell 0.2 to
1.6 percent.
Miners shed some of Tuesday's gains as copper <MCU3> fell to
a near two-week low, with Vedanta Resources <VED.L>, Antofagasta
<ANTO.L>, Xstrata <XTA.L>, Kazakhmys <KAZ.L>, Anglo American
<AAL.L> and BHP Billiton down between 1.0 and 2.4 percent.
Eurasian Natural Resources Corporation <ENRC.L>, however,
provided some respite for the sector. Its shares rose 7.1
percent after the Kazakh-focused miner posted a fall in
first-half earnings that was smaller than expected.
[]
Among other blue-chip gainers, Serco <SRP.L> climbed 1.1
percent as Evolution Securities initiated coverage of the
outsourcing group with a "buy" rating and 500 pence target.
Retailers saw good demand, with Next <NXT.L>, Marks &
Spencer <MKS.L> and Home Retail Group <HOME.L> up between 0.9
and 1.2 percent.
MPC VOTE SPLIT
Bank of England Governor Mervyn King and two other Monetary
Policy Committee members wanted to raise Britain's quantitative
easing programme by 75 billion pounds this month but were
outvoted by their six colleagues.
The 6-3 split vote revealed in the minutes of the MPC's
August 5-6 meeting published on Wednesday -- which showed Tim
Besley and David Miles joining King's dissent -- sent shockwaves
through currency and bond markets which had been expecting a
unanimous vote in favour of the 50 billion pounds extension,
although equities remained largely unmoved. []
Elsewhere, British manufacturing orders fell slightly more
than expected in August but firms were less gloomy about their
future production than at any time in the last year, a survey
showed.
The Confederation of British Industry's industrial trends
survey showed the order book balance rose to -54 from -59 in
July. Analysts had forecast a reading of -50. []
Ex-dividends knocked 9.65 points off the FTSE index, with
British American Tobacco <BATS.L>, Hammerson <HMSO.L>, HSBC
<HSBA.L>, Pearson <PSON.L>, Prudential <PRU.L>, SABMiller
<SAB.L>, Scottish & Southern Energy <SSE.L> and Thomson Reuters
<TRIL.L> all losing their payout attractions on Wednesday.
(Editing by Simon Jessop)
