* Banks fall; U.S. tells Citi, BofA to raise capital -WSJ
* WHO raises pandemic alert level
* BA, tour operators fall; drugmakers gain
By Dominic Lau
LONDON, April 28 (Reuters) - Britain's top share index lost
2.3 percent by midday on Tuesday on intensifying concerns over a
swine flu outbreak and on fears of banks needing more capital.
By 1045 GMT, the FTSE 100 <> was down 93.45 points at
4,073.56, after closing 0.3 percent higher on Monday as
drugmakers gained on hopes of increased demand for their
products amid the flu scare.
Banks were the second biggest drag on the index after the
Wall Street Journal said U.S. regulators had told Citigroup
<C.N> and Bank of America <BAC.N> they may need to raise more
capital following recent stress testing of the two banks.
[]
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Lloyds
Banking Group <LLOY.L>, HSBC <HSBA.L> and Standard Chartered
<STAN.L> lost between 2.2 and 4.5 percent.
British Airways <BAY.L> and tour operators extended the
previous session's losses as the death toll from swine flu in
Mexico rose to 149 and the World Health Organization raised its
pandemic alert level over the deadly virus to phase 4,
indicating the infection could spread between humans to cause
"community-level outbreaks".
British Airways, Carnival <CCL.L>, Thomas Cook <TCG.L> and
TUI Travel <TT.L> sagged between 4.1 and 6.1 percent.
Jeremy Batstone-Carr, head of private client research at
Charles Stanley, said the flu scare partly triggered the
sell-off after recent strong gains.
"It's my sense that the impact (of the flu) on the global
economy is limited. However, if I am wrong and the situation
does escalate, the potential for an outbreak ... to have a very
negative, potentially even catastrophic impact on the global
economy can't be ruled out," he said.
Drugmaker GlaxoSmithKline <GSK.L> gained 1.5 percent to top
the FTSE 100 gainers' list on hopes of higher demand for their
flu drugs.
GlaxoSmithKline's Relenza, along with Roche's <ROG.VX>
Tamiflu, is a recommended drug for seasonal flu and the U.S.
Food and Drug Administration has authorised emergency uses of
flu drugs Tamiflu and Relenza.
"With the World Health Organization raising the alert level
and the extra cases being found, the market is being forced to
take it more seriously than yesterday," said David Jones, chief
market strategist at IG Markets.
(For more on the flu virus, double click on [])
BRIGHT SPOT IN BP
Miners took most points off the index, falling in line with
softer base metal prices. BHP Billiton <BLT.L>, Rio Tinto
<RIO.L>, Anglo American <AAL.L>, Xstrata <XTA.L>, Kazakhmys
<KAZ.L> and Eurasian Natural Resources <ENRC.L> shed 3.7 to 9
percent.
BP <BP.L> ticked up 0.2 percent after the oil major's
first-quarterly results beat all analysts' forecasts.
[]
Other oil producers fell, tracking weaker crude prices
<CLc1>. Royal Dutch Shell <RDSa.L>, BG Group <BG.L>, Cairn
Energy <CNE.L> and Tullow Oil <TLW.L> were down 1.4 to 2.6
percent.
Among other individual movers, Liberty International <LII.L>
slumped 8.1 percent as the UK's biggest shopping malls owner
added to losses the previous session following plans to raise up
to 600 million pounds through new share offers to reduce its
debt.
WPP <WPP.L> dropped 5.7 percent after the advertising group
said it may cut its full-year forecast after first-quarter
like-for-like sales fell 5.8 percent. []
Friends Provident <FP.L> sank 6.7 percent. The life insurer
reported a 40 percent drop in its first-quarter sales, but said
a new deal to sell insurance through retail giant Tesco <TSCO.L>
should boost sales in future. []
(Editing by Jon Loades-Carter)
