* FTSE 100 down 4 pct, touches 5-1/2 year low
* Miners, energy stocks hit by falling commodity prices
* Banks bruised by intensifying financial crisis
(For more on the financial crisis, click on [])
By Simon Falush
LONDON, Oct 27 (Reuters) - Britain's top share index slid by
4 percent by midday on Monday, as increasing anxiety about the
state of the global economy hit embattled banks and demand
worries sent energy and mining stocks tumbling.
By 1120 GMT the FTSE 100 <> was down 152.89 points at
3,730.47, having earlier touched a trough of 3,665.21, its
lowest in 5-1/2 years.
European equity indexes slid after Japan's Nikkei <>
fell 6.4 percent to a 26 year closing low while Hong Kong's Hang
Seng <> tumbled nearly 13 percent.
Miners were among the hardest hit with metal prices falling
again. Xtrata <XTA.L>, Lonmin <LMI.L>, Anglo American <AAL.L>
and Eurasian Natural Resources <ENRC.L> lost between 7.7 and
10.3 percent.
Colin McLean, managing director at SVM Asset Management in
Edinburgh, noted that miners are particularly vulnerable as they
are heavily exposed to emerging markets which have seen sharper
falls than developed markets in recent weeks.
"Miners are often based in esoteric markets and people are
very concerned about what might happen in those countries," he
said.
The Group of Seven rich nations tried to cool a rally in the
yen with a warning against volatility as Tokyo scrambled to
shield its largest banks from a spiralling global financial
crisis.
"We're going to get further big swings as the markets watch
for what the authorities are going to do," said Neil Parker,
market strategist at Royal Bank of Scotland.
UK Prime Minister Gordon Brown has hinted at the possibility
that lower inflation thanks to falling oil prices could prompt
central banks around the world to make more joint interest rate
cuts, the BBC reported. []
Energy stocks were also on the ropes with U.S. crude oil
futures <CLc1> slipping to below $62 a barrel, down from a peak
of $147 in July.
BP <BP.L> was down 4 percent, BG Group <BG.L> shed 5.5
percent and Royal Dutch Shell <RDSa.L> lost 5.3 percent.
Banks, which have suffered as the credit crisis has forced
the government to nationalise or take large stakes in leading
players, were also on the back foot.
HSBC <HSBA.L> shed 8.5 percent while Barclays <BARC.L> lost
2.8 percent and Royal Bank of Scotland <RBS.L> fell 6 percent.
HOUSING WOES
Also weighing on banks, English and Welsh house prices fell
by 7.3 percent in the year to October, with the pace of decline
accelerating to take prices back to their lowest since March
2006, property consultancy Hometrack said. []
The banking index <.FTASX8350> is down 11.4 percent this
month and mired at its lowest since July 1996.
Insurers were also deep in negative territory with Aviva
<AV.L> falling 11.5 percent, the biggest percentage loser in the
blue-chip index. The Times said the insurer is reconsidering the
terms of a planned 1 billion pound payout to with-profit
policyholders. []
JPMorgan said in a note to clients that dividend cuts within
the British insurance sector were likely due to weaker equity
markets.
Standard Life <SL.L> fell 6.7 percent while Prudential
<PRU.L> lost 3.8 percent.
London Stock Exchange <LSE.L> was down 4.1 percent. The
Sunday Telegraph reported the bourse has hired a recruiting firm
to find a successor to its long-term chief executive, Clara
Furse. []
(Editing by Quentin Bryar)
