* FTSE 100 index down 0.9 pct
* Commods fall as Chinese rate cut fails to excite
* Banks retreat from earlier gains
By Joanne Frearson
LONDON, Dec 22 (Reuters) - Britain's FTSE 100 <> index
fell at midday on Monday, with commodity stocks leading the
losers as the Chinese rate cut failed to excite the sector and
worries about the extent of the global slowdown weighed.
At 1130 GMT, the FTSE 100 index was down 37.38 points, or
0.9 percent at 4,249.55. The UK blue chip index closed down 1
percent on Friday.
"The market is on the downside today. I think the negative
news from Toyota <7203.T> has tested confidence, this is the
second profit warning from the group and highlights the weakness
in the U.S. and Europe," Keith Bowman, analyst at Hargreaves
Lansdown, said.
"If a manufacturer like Toyota is seeing difficulties it
does not read particularly well for the rest."
Meanwhile, two key members of the Bank of England's Monetary
Policy Committee said monetary policy alone cannot help the
economy avoid some of the worst consequences of the global
credit crunch. []
Sterling hit a record low on a trade-weighted basis due to
ongoing worries that UK interest rates will have to fall much
more to help a struggling economy.
Miners took the most points off the index as China's central
bank cut banks' lending and deposit rates by 0.27 percentage
points, the fifth cut since mid-September.
"There is nothing to get excited about, the interest rate
cut in China today has done little to help the miners. It is
only 27 basis points and is unlikely to do much," said Rob
Griffiths, strategist at Cazenove
Rio Tinto <RIO.L> fell 1.1 percent after it said it is in
the process of shutting down all it iron ore mines in
Australia's Pilbara region for two weeks to cut production by 10
percent by year-end in the face of declining demand from steel
mills. []
Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Vedanta
Resources <VED.L> and Xstrata <XTA.L> were down 1.4-4.6 percent.
Energy stocks were in also the doldrums as crude <CLc1>
traded at around $42 a barrel. BG Group <BG.L>, BP <BP.L> and
Tullow Oil <TLW.L> were down 1-3.7 percent.
Cairn Energy <CNE.L> retreated from earlier rises to trade
2.5 percent lower. The group initially gained after Cairn India
<CAIL.BO> said it had made an oil and gas discovery near its
existing field in the western Indian state of Rajasthan.
[]
BANKS RETREAT FROM EARLIER GAINS
Banks retreated from earlier gains, although HBOS <HBOS.L>
was up 0.8 percent, snapping a seven-session losing run.
Barclays <BARC.L> lost 2.8 percent. Its Chief Executive John
Varley told BBC television that bank lending will take 1-2 years
to return to normal, and asset prices need as much as 18 months
to stabilise. []
The group is also considering selling its private equity arm
to a management consortium in a move to raise capital for the
bank, the Mail on Sunday newspaper reported. []
Retailers fell, following a recent strong run, amid mixed
signals in the last few days before Christmas as analysts
pointed to the downside of their cutting prices to boost their
top lines.
John Lewis [], the employee-owned group, said sales
picked up during the last weekend before Christmas, the most
important time of year for the sector, but were still down on a
year ago.
Marks & Spencer <MKS.L> shed 4.9 percent, Home Retail
<HOME.L> sank 11 percent, Next <NXT.L> lost 2.1 percent and
Kingfisher <KGF.L> sagged 3.8 percent.
(Editing by Victoria Bryan)
