* FTSE ends down 5.7 percent at 4,272.41 points
* Jittery market shrugs off 150 bps rate cut from BoE
* Commodities shares, banks tumble
By Rebekah Curtis
LONDON, Nov 6 (Reuters) - Britain's FTSE 100 <> slid
5.7 percent on Thursday, with banks and commodities skidding
after a surprise 150 basis-point rate cut by the Bank of
England's which failed to calm investors' jangled nerves.
The FTSE ended down 258.32 points at 4,272.41 points.
The index briefly rallied after the rate cut, but headed
south again as investors, bracing themselves for a recession,
focused on how deeply a snowballing financial crisis would
damage the economy.
British blue-chip shares have shed about 34 percent in value
so far this year in a credit crisis that has put the brakes on
world growth and wreaked havoc and brought hefty losses in the
global banking system.
The Bank of England (BoE) slashed borrowing costs to 3
percent, their lowest level in more than half a century, and the
central bank's biggest cut since it was made independent in
1997. (For a TAKE A LOOK on the BoE rate cut, click on
[])
"While clearly this is good news in the long term,
inevitably it just shows what a desperate situation the economy
is in at the moment, and the fact that they're having to use
historically drastic action to try to turn things around," said
Henk Potts, strategist at Barclays stockbrokers.
Banks were standout losers on the day, with Barclays
<BARC.L>, HSBC <HSBA.L>, Lloyds TSB <LLOY.L> and Royal Bank of
Scotland <RBS.L> down between about 4 and 10 percent.
Lloyds said it would cut its standard variable rate on
mortgages to 5 percent from 6.5 percent after the Bank of
England slashed interest rates by 150 basis points to 3 percent.
Most economists polled by Reuters had forecast a half-point
cut from the BoE, although several had changed their forecasts
to 100 basis points after gloomy data.
"This is not that they know something that we don't. What
the Bank of England have admitted today was that they were
behind the curve," said Neil Parker, a strategist at Royal Bank
of Scotland. "It's a bold move, it's the right move."
ECB RATE-CUT
The European Central Bank was tamer with the axe, cutting
borrowing costs by 50 basis points to 3.25 percent. Shares
skidded across Europe.
U.S. stocks fell between about 2 and 3 percent, depressed by
a disappointing revenue outlook from Cisco Systems <CSCO.O> and
bleak sales from some major U.S. retailers.
British oil shares languished with crude prices <CLc1>.
Royal Dutch Shell <RDSa.L> and BP <BP.L> slid 7.4 and 5.7
percent respectively.
Miners tracked downward pressure on metals prices as the
dollar climbed. Rio Tinto <RIO.L> and BHP Billiton <BLT.L> both
lost 15 percent.
Vedanta Resources <VED.L> tumbled 20.5 percent after the
India-focused miner posted a 24.7 percent drop in first-half
profit to $350 million, but said it was well placed to cope with
lower metal prices.
Man Group <EMG.L> was the FTSE's biggest casualty, plunging
31.2 percent after the hedge fund group reported a 24 percent
fall in pretax profit to $622 million in the six months to
end-September due to a drop in performance fees and amortisation
charges.
Private equity group 3i <III.L> fell 12.9 percent after the
firm said first-half revenues from company disposals were down
43 percent as the credit crisis had made it difficult to sell
companies in which it had invested.
British technology group Invensys Plc <ISYS.L> fell 17.6
percent after it posted weaker than expected first half
operating profit and said sales of its control systems were
suffering in the consumer downturn, sending its shares down 13.5
percent.
The BoE's interest rate decision comes at a time when
British house prices are plunging. House prices fell by a record
14.9 percent on the year in October, the Halifax house price
survey showed. []
But shares in International Power <IPR.L> rose 2.8 percent
as investors took comfort from a positive trading update,
analysts said. The British power generator said it expected
another year of growth in 2008.
(Additional reporting by Harpreet Bhal; Editing by David
Cowell)
