* FTSE falls 2 percent, snaps six days of gains
* Energy stocks, miners slump as commodity prices slide
* Insurers benefit, pharmas pressured by Obama victory
(For more on the financial crisis, click on [])
By Simon Falush
LONDON, Nov 5 (Reuters) - Britain's top share index fell 2
percent by midday on Wednesday, ending a six-day rising streak,
as investor focus returned to the stuttering domestic economy
after Barack Obama's presidential election victory in the U.S.
By 1137 GMT, the benchmark FTSE 100 <> had fallen 90.40
points to 4,549.10. The index recorded its highest closing level
in four weeks at Tuesday's close, up over 20 percent from its
trough set in October, but is still down nearly 30 percent for
the year amid a global equity slump.
"We've had a long up move but we're not out of the woods and
the economic environment continues to deteriorate," said Jeremy
Batstone-Carr, head of private client research at Charles
Stanley.
Energy stocks took the most points off the index as crude
oil prices fell over 3 percent to $68. Prices retreated after a
spate of profit taking following signs that Saudi Arabia and
other OPEC member countries had made promised cuts in crude
production.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L> and
Cairn Energy <CNE.L> fell between 2.3 and 3.4 percent.
Royal Dutch Shell also traded ex-dividend.
Some analysts said the Obama victory was adding to the
energy sector's weakness.
"Obama is seen as anti-big oil so the market is seeing
reason to take profit in oil majors," said Jim Wood Smith, head
of research at Williams De Broe in Exeter.
Miners also took a beating on falling metals prices.
Kazakhmys <KAZ.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L>
and Lonmin <LMI.L> fell between 7.1 and 10.2 percent. A price
target cut from Morgan Stanley also weighed on the stocks.
[]
British mid-market fashion retailer Next <NXT.L> gained 3
percent after it met its profit forecast, recovering from early
losses on initial negative investor reaction to the company
saying 2009 was going to be tough.
Underlining weakness in the UK economy, Britain's dominant
services sector shrank in October at its fastest pace since the
series began in 1997, data from Britain's Chartered Institute of
Purchasing and Supply said. []
OBAMA EFFECT
Obama's U.S election victory brought to an end uncertainty
over who will lead the world's largest economy at a time of
financial turmoil.
U.S stocks had their biggest election rally ever on Tuesday,
while Asian shares hit a three-week high after the election
results.
Analysts said construction and infrastructure stocks are
potential gainers from an Obama win, with European commercial
banks set to benefit from opportunities to acquire U.S regional
banks.
Other possible gainers include healthcare equipment and
insurance firms, while a strong dollar would be good for
European exporters, analysts said.
Insurers Prudential <PRU.L> and Aviva <AV.L> advanced 4.1
and 0.9 percent respectively. But Old Mutual <OML.L> shed 5.1
percent after going ex-dividend and after Morgan Stanley
downgraded the stock to "equal-weight" from "overweight".
However, worries about pressure on U.S. drug prices under a
democrat administration saw European drug stocks underperform.
[]
GlaxoSmithKline <GSK.L> fell 4.4 percent, AstraZeneca
<AZN.L> lost 3.7 percent while Shire <SHP.L> shed 3.1 percent.
Bus and train operator FirstGroup <FGP.L> was the index's
biggest gainer, up 5.6 percent after it said its second half had
started well with trading in line with expectations. This
boosted sentiment on the sector, helping lift rival Stagecoach
<SGC.L> 5.3 percent.
Unilever <ULVR.L> slipped 1.9 percent after going
ex-dividend.
Mid-cap British broadcaster ITV <ITV.L> lost 2.4 percent,
after it said television and online adverts were expected to be
hit by the economic slowdown, making 2009 challenging.
(Additional reporting by Harpreet Bhal; Editing by Victoria
Bryan)
