By Dominic Lau
LONDON, April 30 (Reuters) - Britain's top share index fell
0.7 percent by midday on Wednesday ahead of an expected interest
rate cut in the United States, as commodity shares tracked
weaker raw material prices and HBOS <HBOS.L> led banks lower.
By 1038 GMT, the FTSE 100 <> was down 44.8 points at
6,044.6. The UK's benchmark index has gained 6 percent so far
this month, on track for its best monthly percentage rise in
five years.
Miners fell in line with metal prices and after Kazakhmys
<KAZ.L> posted an 18.4 percent fall in first-quarter copper
cathode production due to smelter shutdown. It said output
should recover in the second half after a "subdued" second
quarter. Kazakhmys was 4.7 percent lower.
Vedanta Resources <VED.L>, Lonmin <LMI.L>, Rio Tinto
<RIO.L>, BHP Billiton <BLT.L> and Anglo American <AAL.L> were
down between 0.3 and 6.1 percent.
Oil majors BP <BP.L> and Royal Dutch Shell <RDSa.L> dipped
after a shar rise in the previous session's sharp due to their
forecast-beating results, and as crude prices <CLc1> eased.
Gas producer BG Group <BG.L> shed 4.8 percent after it said
it planned a $12 billion bid for an Australian utility. BG beat
forecasts with a 78 percent jump in first-quarter profit,
powered by high gas and oil prices and rising production.
All eyes are on the U.S. Federal Reserve's rate decision,
due after European market closes. The Fed is expected to cut
rates by a modest quarter percentage point and may suggest the
rate-cutting cycle it kicked off last autumn has reached an end.
"Because of all the speculation that the Fed may cut by a
quarter of percentage point this evening and then go on an
extended summer holiday ... the market may take that as an
indication that the dollar might actually recover some of its
poise," said Jeremy Batstone-Carr, head of private client
research at Charles Stanley.
"To the extent, the speculative enthusiasm for things like
raw materials that have been built up as a consequence to the
correlation of the dollar might unwind a little bit."
But Batstone-Carr said he expected the dollar to remain weak
because of "structural concerns" in the U.S. economy.
U.S. gross domestic data are also due later in the day.
GLOOMY OUTLOOK WEIGHS ON HBOS
Banks were also down after analysts cut their earnings
forecasts and price targets for HBOS <HBOS.L>, which announced a
4 billion pound rights issue on Tuesday.
HBOS lost 4.2 percent, while both Barclays <BARC.L> and
Royal Bank of Scotland <RBS.L> dropped 2.9 percent and Lloyds
TSB <LLOY.L> slipped 2.6 percent.
HSBC <HSBA.L>, however, was up 0.9 percent after Goldman
Sachs upgraded the bank <0005.HK> to "buy" from "sell".
Home Retail Group <HOME.L> advanced 5.7 percent to top the
gainers' list on the FTSE 100 after it reported a 15 percent
rise in annual profits even though it said the outlook for
consumer spending was weaker for the new fiinancial year.
Admiral Group <ADML.L> was up 4.5 percent after Citigroup
upgraded its rating on the car insurer to "buy" from "hold".
Pay TV-firm BSkyB <BSY.L> put on 2.5 percent after it added
56,000 net new customers in the third quarter, in line with
forecasts, and said it was on track for the full year.
GlaxoSmithKline <GSK.L>, G4S <GFS.L>, Reed Elsevier <REL.L>
and Wm Morrison Supermarkets <MRW.L> all fell after going
ex-dividend.
AstraZenca <AZN.L> added 1.2 percent. The Anglo-Swedish drug
maker was seeking U.S. approval to sell its asthma drug
Symbicort for chronic obstructive pulmonary disease, ramping up
competition with GlaxoSmithKline's Advair.
(Additional reporting by Michael Taylor)
(Editing by Richard Hubbard)
(dominic.lau@reuters.com; +44 20 7542 5440; Reuters Messaging:
dominic.lau.reuters.com@reuters.net))
