* FTSE 100 sheds 0.4 pct
* Banks lead fallers after British Q4 GDP data
* Diageo lifted by further positive broker comment
LONDON, Jan 25 (Reuters) - Britain's top share index fell on
Tuesday, weighed down by banking stocks and retailers, as
investors worried over the UK economy after a shock 0.5-percent
contraction in GDP in the last three months of 2010.
By 1216 GMT, the FTSE 100 <> was down 20.82 points, or
0.4 percent, at 5,923.03, retreating after gaining 0.8 percent
in the previous session.
Economists had only expected growth to slow to 0.5 percent
after 0.7 percent growth in the third quarter, though
uncertainty over the impact of December's snow disruption meant
the range of forecasts was wide. []
Market watchers said the weak data reinforced concerns about
whether economic recovery will be sustained when the government
accelerates a programme of deep public spending cuts.
"It poses a real threat Britain could go into a double-dip
recession, particularly if the austerity measures slow growth
more excessively than the government are predicting," Joshua
Raymond, market strategist at City Index, said.
"It's just hampered a bit of appetite for risk," he said.
Banks <.FTNMX8350> were the biggest drag on the blue chip
index, with part-nationalised lender Lloyds Banking Group
<LLOY.L> the worst off, down 2.6 percent.
Global lender HSBC <HSBA.L>, however, bucked the weak sector
trend, adding 0.4 percent.
Retailers were also out of favour, with Next <NXT.L> among
the top FTSE 100 fallers, as the GDP data created concerns about
consumers' willingness to spend.
MINERS WEIGH
Miners <.FTNMX1770> were out of favour. African Barrick Gold
<ABGL.L> and Randgold Resources <RRS.L> were among the worst
off, down 2.9 percent and 2.5 percent respectively, after the
price of gold <=XAU> hit a 10-week low.
Precious metals processor Johnson Matthey <JMAT.L> rallied,
up 1.6 percent, helped by improving sales trends in the
automotive industry for which it manufactures catalytic
convertors, traders said.
BG Group <BG.L> added 0.6 percent. The company is to invest
$10 billion in Brazil over the next decade as it seeks to
accelerate development of the country's deepwater oil fields,
the Daily Telegraph reported.
Drinks group Diageo <DGE.L> took on 0.7 percent supported by
further positive broker comment and figures for the U.S. spirits
industry.
Morgan Stanley raised its target price for Diageo, with
Exane BNP Paribas having done the same on Monday.
U.S. stock index futures <SPc1> <DJc1> <NDc1> pointed to a
lower opening on Wall Street, with BlackRock <BLK.N>, Yahoo
<YHOO.O>, Johnson & Johnson <JNJ.N>, DuPont <DD.N>, and
Harley-Davidson <HOG.N> among companies reporting results on
Tuesday.
(Editing by Jon Loades-Carter)
