* FTSE 100 loses 0.1 percent
* Banks gain, Barclays up on Morgan Stanley upgrade
* Energy stocks slide on weaker commodities prices
* Fears on global outlook dent risk appetite
* BT falls after results, but Invensys gains
By David Brett
LONDON, May 14 (Reuters) - Britain's top share index inched
lower in mid-session on Thursday, as skittish thin trade saw
weakness in energy stocks outweigh strength in banks.
By 1044 GMT the FTSE 100 <> was down 2.94 points or 0.1
percent at 4,328.43, having fallen 2.1 percent to 4,331.37
points on Wednesday.
The index is down 2.6 percent on the year, but has recovered
25 percent since its six-year low on March 9.
Banks, which slid sharply the previous session as investors
retreated from more cyclical stocks, were the biggest gainers.
"We're seeing investors selectively switch back into
cyclicals after defensives (were favoured) in the past few days.
The check in the market we've seen is just a short-term
correction," said Manoj Ladwa, senior trader at ETX Capital.
Barclays <BARC.L> climbed 5.3 percent after Morgan Stanley
upgraded the stock to "overweight" from "equal weight".
HSBC <HSBA.L>, Lloyds <LLOY.L>, RBS <RBS.L> and Standard
Chartered <STAN.L> rose between 1.8 and 5.7 percent.
Weak U.S. retail sales data on Wednesday suggested consumers
were still struggling in the face of a weakening economy,
denting risk appetite and knocking equity markets globally. The
data also softened the demand outlook, hitting raw material
prices.
Energy stocks were the main drag on the index as metal
prices and crude <CLc1> retreated to below $57 a barrel.
BP <BP.L>, Royal Dutch Shell <RDSa.L> and Cairn Energy
<CNE.L> lost 0.8-2.1 percent.
MIXED MINERS
Miners were mixed as silver miner Fresnillo <FRES.L> and
gold miner Rangold <RRS.L> added 3.2 and 3.3 percent
respectively, supported by strength in precious metal prices.
But Lonmin <LMI.L>, Kazakhmys <KAZ.L> and Anglo American
<AAAL.L> were in negative territory.
The index oscillated between black and red, as investors
were uncertain about what stance to take after the sharp rally
since early March.
"We won't see the lows of March again but there is
short-term worry over the health of the global economy," said
Jeremy Batstone-Carr, analyst at Charles Stanley.
"There's a very active debate going on between pessimistic
bond traders who feel there maybe a need for more stimulus and
the more positive equity traders who feel the worst is behind
us."
On a busy day for corporate results, BT Group <BT.L> dropped
3.2 percent after it cut its dividend and said a further 15,000
jobs would go after a 1.58 billion pound writedown and a
restructuring at its Global Services unit drove it to a
fourth-quarter loss.
British engineer Invensys <ISYS.L> gained 6.7 percent after
beating expectations on operating profit and resuming the
payment of a final dividend.
"The market is still rewarding companies where there's
robust financial management, and commitment to progressive
dividend policy," Batstone-Carr said.
British infrastructure company Balfour Beatty also gained,
up 1.6 percent after it forecast further progress in 2009
overall after its performance in the building sector exceeded
that of last year. []
Investors will look to U.S. PPI and jobless claims data due
at 1230 GMT for more clues on the state of the economy.
(Editing by Jon Loades-Carter)
