* Energy stocks, miners slide on lower commodity prices
* Banks sharply lower retreating from last week's gains
* AstraZeneca gains on drug trials; defensive tobacco up
By Simon Falush
LONDON, March 30 (Reuters) - Weak commodities and renewed
fears about the banking sector dragged Britain's leading share
index 2 percent lower by midday on Monday with sentiment also
hit by a rejection of turnaround plans for U.S. automakers.
By 1057 GMT the FTSE 100 <> was 75.96 points lower at
3,822.89, after falling 0.7 percent on Friday, and is down 14.5
percent this year as the first quarter draws to a close.
The Bank of Spain will bail out regional savings bank Caja
Castilla la Mancha, the first Spanish banking rescue since the
financial crisis began. []
Britain's largest building society Nationwide said it has
taken over collapsed Scottish Lender Dunfermline after the
government failed to bail it out over the weekend.
[]
The latest revelations helped push the UK banking index
<.FTNMX8350> down 6.6 percent, with Barclays <BARC.L> down 7.7
percent as investors were unsettled by a report the bank will
not take part in Britain's asset protection scheme.
Barclays gained 24 percent on Friday, and it is still over
200 percent above its low set in January, as the sector and
broader market recovered on hopes the worst of the financial
crisis may be past.
"The markets got a bit ahead of themselves (last week),
reacting to data that was less bad than feared," said Jeremy
Batstone-Carr, analyst at Charles Stanley.
"We are at a period of maximum vulnerability, it's easy to
recover from lows but it's hard to see traction for recovery
with the macro view not being prepossessing and the earnings
outlook remains dire."
HSBC <HSBA.L>, Standard Chartered <STAN.L>, Royal Bank of
Scotland <RBS.L> and Lloyds Banking Group <LLOY.L> slid between
4.1 and 7.9 percent.
AUTO REJECTION
The White House autos panel rejected the turnaround plans of
General Motors <GM.N> and Chrysler LLC and warned both could be
put through bankruptcy to slash debts. []
This move helped drive Asian and European stocks lower, with
U.S. markets expected to follow suit later on Monday.
Data showing that UK mortgage approvals were higher than
expected in February did little to lighten the mood.
[]
Reminding investors about the grim economic backdrop facing
the British economy, house prices in England and Wales are at a
record 10.3 percent lower than a year ago, although the prices
fell at their slowest pace for 10 months in March, Hometrack
said. []
Energy majors lost ground and were the main drag on the
index as crude retreated more than 3 percent to below $51 per
barrel.
BP <BP.L>, Royal Dutch Shell <RDSa.L> BG Group <BG.L> fell
1.8 to 2.5 percent.
Miners were also under pressure with metal prices dented as
increasing risk aversion hit appetite for the stocks.
Rio Tinto <RIO.L>, Kazakhmys <KAZ.L>, Eurasian Natural
Resources <ENRC.L>, Anglo American <AAL.L>, Lonmin <LMI.L> and
BHP Billiton <BLT.L> fell between 3.3 and 7.8 percent.
Shares in AstraZeneca <AZN.L> bucked the sharply weaker
market trend, adding 1.4 percent following positive clinical
trial results with its blockbuster cholesterol drug Crestor at
the weekend. []
Vodafone <VOD.L> was also in the black, gaining 1.3 percent
after RBS upgraded it to "buy" from "hold".
Defensive tobacco stocks also gained ground as investors
looked to shelter assets in sectors seen as resilient in a
downturn. Imperial Tobacco <IMT.L> added 1.7 percent while
British American Tobacco gained 1.7 percent.
(Editing by Hans Peters)
