* Miners fall; Rio posts drop in aluminium output
* Defensives in demand, lend support
By Dominic Lau
LONDON, April 15 (Reuters) - Britain's FTSE 100 <>
edged lower by midday on Wednesday led by mining stocks, weighed
by a fall in Rio Tinto <RIO.L> after it posted weak output data,
although defensive issues were lending some support.
By 1046 GMT, the UK index was down 16.14 points, or 0.4
percent, at 3,972.85 in a choppy session after trading as high
as 4,023.35. The benchmark is down 10 percent this year, but is
up 14.8 percent since hitting a six-year low on March 9.
Rio Tinto <RIO.L> shed 4.6 percent after its first-quarter
aluminium output fell 6 percent as the world's biggest producer
attempted to better balance supply with sinking global demand
from industrial sectors.
The mining sector also suffered on news that China's annual
GDP growth slipped to a record low in the first quarter. Xstrata
<XTA.L>, Vedanta Resources <VED.L>, Kazakhmys <KAZ.L>, BHP
Billiton <BLT.L> and Anglo American <AAL.L> dropped 3.5 to 6
percent.
"There is a feeling out there nobody is quite sure which way
everything is going to go at the moment," said Howard Wheeldon,
senior strategist at BGC Partners.
"We are see-sawing from one set of statistics to another.
They will be bad, they will be good. The market will just follow
that. The trend remains uncertain."
Defensive stocks like drugmakers, cigarette makers,
utilities, and food retailers and producers were in demand after
they lagged behind cyclicals in the recent rally, and as growth
concerns returned to haunt investors after weak U.S. retail
sales data.
GlaxoSmithKline <GSK.L>, Imperial Tobacco <IMT.L>, British
American Tobacco <BATS.L>, Centrica <CNA.L>, Morrison
Supermarkets <MRW.L>, Unilever <ULVR.L> and Tesco <TSCO.L> put
on between 1.3 and 3.4 percent.
BAE Systems <BAES.L> advanced 3.1 percent on hopes for
increased contract work resulting from the U.S. defence budget
supplements.
Banks were also weaker, in general, with Barclays <BARC.L>,
HSBC <HSBA.L>, Royal Bank of Scotland <RBS.L> and Standard
Chartered <STAN.L> off 0.8 to 3.7 percent.
"It's a reality check. The rally we had in the last month is
a bear market rally," said David Morrison, market strategist at
GFT Global Markets.
"I don't think the underlining problems have been addressed
in the banking and the financial sector. They still exist. We
are a long way (from) being through this."
Also in the financial sector, Schroders <SDR.L> sank 7.8
percent, knocked by a Credit Suisse downgrade to "underperform"
from "neutral" ahead of the fund manager's first-quarter trading
statement, due on April 23.
Insurer Legal & General <LGEN.L> also fell after going
ex-dividend.
(Additional reporting by Jon Hopkins; editing by Simon Jessop)
