* FTSE led lower by banks, miners
* RBS lower after report of possible cash call
* Defensive pharmaceutical stocks find favour
By Harpreet Bhal
LONDON, Sept 21 (Reuters) - Weakness in banks and miners led
Britain's blue-chip shares lower by midday on Monday, hit by
profit taking following hefty gains the previous week, while
Royal Bank of Scotland fell on talk of a possible cash call.
By 1109 GMT, the FTSE 100 <> had fallen 36.27 points,
or 0.7 percent, to 5,136.32 points, on course to snap a
six-session run of gains which resulted in it reaching a new
12-month high last week, after breaching the 5,100 level.
Gains in UK blue chips since the lows in March have helped
shares rebound almost 50 percent and the index is on track to
post its best percentage quarterly gain since 1984, but analysts
warn that some profit taking was expected after the strong run.
"After the adrenalin of last week... it was perhaps
inevitable that more investors would choose to book profits than
not so far today," said Anthony Grech, market strategist at IG
Index.
"We're still starting off from a pretty firm-footing and as
the week continues it'll be interesting to see if the positive
sentiment continues and whether investors have the stomach for
the next assault, the 5,200 level," he said.
Banks were the FTSE 100's worst performers, led lower by
Royal Bank of Scotland <RBS.L>, which lost 5.4 percent after a
report the lender is thought to be considering a cash call.
RBS is talking to investors to gauge support for a 'modest'
equity placement of 3 billion to 4 billion pounds, a source
familiar with the situation said on Sunday, with the share issue
to be used to replace a small portion of the government's
economic interest in the bank. []
Lloyds Banking Group <LLOY.L>, Barclays <BARC.L>, HSBC
<HSBA.L> and Standard Chartered <STAN.L> fell 1.2 to 3.4
percent.
Miners were in negative territory. Kazakhmys <KAZ.L> fell 3
percent after Citigroup cut its rating on the stock to "hold"
from "buy", while Vedanta Resources <VED.L> shed 2.9 percent
after Goldman Sachs downgraded its stance on the stock to
"neutral" from "buy".
BHP Billiton <BLT.L> fell 2.1 percent. The mining giant
plans to use part of a cash surplus of around $18 billion to
fund a round of acquisitions, possibly involving some large
rivals, The Wall Street Journal reported. []
Fellow miners Lonmin <LMI.L>, Fresnillo <FRES.L> and Xstrata
<XTA.L> lost between 2.3 and 4.2 percent, while Eurasian Natural
Resources <ENRC.L> bucked the trend to gain 0.3 percent,
benefitting from a Citigroup upgrade to "buy" from "hold".
Energy stocks were mixed as crude <CLc1> slipped below $72 a
barrel. Tullow Oil <TLW.L> lost 2 percent, following a strong
run last week after it reported new oil discoveries, while BG
Group <BG.L> and Cairn Energy <CNE.L> were 1.8 and 0.2 percent
lower.
Royal Dutch Shell <RDSa.L> was 0.6 percent higher, supported
by a Banc of America-Merrill Lynch upgrade to "buy", while BP
<BP.L> was up 0.5 percent.
PHARMAS ADVANCE
On the upside, support for the index came from
pharmaceutical firms, which benefitted from their defensive
qualities.
GlaxoSmithKline <GSK.L>, AstraZeneca <AZN.L> and Shire
<SHP.L> advanced 0.1 to 0.4 percent.
Marks & Spencer found some strength from a target price hike
by Societe Generale to 500 pence from 445 pence. The retailer
gained 1.1 percent.
Meanwhile, asking prices for homes in England and Wales are,
on average, 1.5 percent lower this month than a year ago, with
the available stock at its lowest for 18 months, property
website Rightmove said on Monday. []
Later on Monday, investors are expected to focus on the U.S.
August leading index report. The report, due at 1400 GMT, is an
index of leading economic indicators which forecasts economic
trends six to nine months ahead.
(Reporting by Harpreet Bhal; editing by Simon Jessop)
