* FTSE 100 slips 0.8 pct
* Metal prices pull miners down
* Banks woes continue as Lehman numbers eagerly awaited
By Michael Taylor
LONDON, Sept 10 (Reuters) - Britain's blue-chip index edged
almost 1 percent lower on Wednesday as falling metal prices hit
commodity shares, while banks slipped ahead of a surprise
release from Lehman Brothers <LEH.N>.
At 1021 GMT, the FTSE 100 <> was down 45.3 points at
5,370.3, after losing 0.6 percent on Tuesday.
Banks accounted for nearly 10 negative index points on
worries over the fate of U.S. investment bank Lehman Brothers
<LEH.N> after Korea Development Bank (KDB) [] said talks
with the U.S. bank have ended for now.
U.S. stocks plunged overnight, driving the benchmark S&P 500
<.SPX> to its biggest one-day fall in 18 months, as concern
about Lehman's ability to raise much-needed capital reignited
fears about the financial sector. []
Lehman shares sank as much as 46 percent, and the number
four U.S. investment bank brought forward the release of "key
strategic initiatives" and quarterly results by a week to around
1130 GMT.
In the UK, HBOS <HBOS.L>, Lloyds TSB <LLOY.L>, Barclays
<BARC.L>, Royal Bank of Scotland <RBS.L>, and Standard Chartered
<STAN.L> shed 0.8-2 percent as the uncertainties in the sector
created by the Lehman situation added to concerns around this
week's U.S. bailout of Fannie Mae <FNM.N> and Freddie Mac
<FRE.N> and to global economic worries.
"Armageddon is the word on everyone's lips today and not
just because of the experiments in Geneva," said Ian Griffiths a
dealer at CMC Markets. "Maybe that's a bit drastic, but if
Lehman Brothers emergency numbers come in under expectations
then we could see a severe amount of downside for U.S. markets."
"The euphoria of Monday's session was indeed short lived as
weaker economic data brought us crashing to earth yesterday."
Adding to the gloom, Old Mutual <OML.L> lost 2.7 percent on
news its chief executive Jim Sutcliffe is to resign and the
insurer is to take writedowns of around 135 million pounds in
the value of preferred stock of Fannie Mae and Freddie Mac.
[].
Broker comment weighed on pubs operator Enterprise Inns
<ETI.L>, down 7.5 percent as Morgan Stanley cut its rating to
"underweight" from "equal-weight" in a corporate sector review.
Enterprise Inns' demotion from the FTSE 100 index is
expected to be confirmed after the latest quarterly indexes
review, due after the close on Wednesday, with miner Ferrexpo
<FXPO.L>, broadcaster ITV <ITV.L> and retailer Carphone
Warehouse <CPW.L> also likely to lose their blue-chip status.
Retail issues also featured among decliners, with British
fashion retailer Next <NXT.L> down 1.6 percent after it posted a
12 percent fall in first-half pretax profit. []
And mid-cap Kesa Electricals <KESA.L> dropped 9.8 percent
after reporting weaker-than-expected first-quarter sales.
[].
Falling metal prices eased mining shares lower, with
Kazakhmys <KAZ.L>, Xstrata <XTA.L> and Rio Tinto <RIO.L> all
negative.
"We are being dragged down by the miners," said Mark Priest,
a senior trader at TradIndex. "With gold way below, silver down
-- all the miners that have done so well to keep the FTSE up are
now paying the price."
On the upside, ITV added 3.9 percent to top the FTSE 100
leaderboard as traders cited persistent bid speculation.
GlaxoSmithKline <GSK.L> added 1 percent. The drugmaker is
paying as much as $1.5 billion to develop new drugs against
inflammatory disease with Anglo-German biotech company Cellzome,
the two groups said.
(Additional reporting by Jon Hopkins; Editing by Paul Bolding)
