* Banks fall; Goldman's rating cut
* Investors eye U.S.; Johnson & Johnson and Intel results
* UK September inflation data misses expectations
* U.S. Q3 results in focus
By David Brett
LONDON, Oct 13 (Reuters) - Britain's FTSE 100 share index
was down 0.1 percent by mid-session on Tuesday, as banks
retreated following a downgrade of U.S. giant Goldman Sachs and
while investors awaited U.S. corporate results.
By 1035 GMT the FTSE 100 <> was 5.73 points lower at
5204.44, having gained 48.30 points, or 0.9 percent to 5,210.17
on Monday, its highest close since late September 2008.
"It could be an emotional and rocky third quarter both sides
of the pond," said Manus Cranny Senior Market Commentator of MF
Global Spreads.
"UK banks are decidedly queasy on the back of the Goldman
Sachs downgrade (by Meridith Whitney Banking Associates) and it
is Barclays that will bear the brunt of a shift in sentiment in
the banking sector," he said.
British banks were weaker as investors awaited results later
this week from several U.S. peers. Barclays <BARC.L> shed 2.9
percent, while Lloyds Banking Group <LLOY.L>, Royal Bank of
Scotland <RBS.L>, and Standard Chartered <STAN.L> lost 1.1 to
2.5 percent.
HSBC <HSBA.L> shed 1 percent after SABB <1060.SE>, its Saudi
affiliate, reported a worse than expected 19.8 percent fall in
third-quarter net profit, hit by an increase in the scale of its
provisions for bad loans. []
U.S. banks JP Morgan Chase <JPM.N>, Citigroup <C.N>, Goldman
Sachs <GS.N> and Bank of America <BAC.N> are all scheduled to
release third-quarter results later this week.
Later on Tuesday earnings data is expected from healthcare
firm Johnson & Johnson <JNJ.N> and, after the U.S. markets
close, from the world's biggest chip-maker Intel <INTC.O>.
U.S. stock index futures pointed to a slightly lower opening
on Wall Street, with futures for the S&P 500 <SPc1>, Dow Jones
<DJc1> and Nasdaq 100 <NDc1> all down around 0.1 percent.
Life insurers fell as investors banked profits following the
sector's recent good run, which has been underpinned by M&A
speculation.
Legal & General <LGEN.L>, a rumoured target for Resolution
<RSL.L> dipped 2.7 percent, while Aviva <AVL.L>, Prudential
<PRU.L> and Friends Provident <FP.L> fell 1.1-1.9 percent.
MINERS MIXED
Heavweight mining stocks were mixed with some profit taking
following Monday's rally, offset by bullish news from Kazakhmys
and gold <XAU=> hitting an historic high during the session.
Among the fallers, Eurasian Natural Resources <ENRC.L>,
Vedanta Resources <VED.L>, Antofagasta <ANTO.L> and BHP Billiton
<BLT.L> shed 0.2 to 1.6 percent.
Copper producer Kazakhmys <KAZ.L> gained 1.5 percent after
the company announced it was in negotiations over a potential $2
billion loan facility to help fund major growth projects.
[]
Rio Tinto delivers a third-quarter production update on
Wednesday. For a preview, double-click on [].
Among individual risers Whitbread <WTB.L> topped the blue
chip gainers chart, up 2.3 percent, after Britain's biggest
hotel and restaurant operator's first-half pretax results
impressed investors by beating expectations. []
Energy shares rose as the crude oil price steadied above $74
a barrel.
BG Group <BG.L>, Royal Dutch Shell <RDSa.L> and Cairn Energy
<CNE.L> added between 0.1 and 1.2 percent.
Tobaccos and beverages were among the top performing sectors
as defensive considerations returned, with drinks group Diageo
<DGE.L> up 0.9 percent and British American Tobacco <BATS.L>
ahead 1 percent.
Investors pushed aside weaker than expected British consumer
price inflation data, which hit its lowest annual rate in five
years.
The Office for National Statistics said the annual rate fell
to 1.1 percent, the lowest since September 2004 and below
analysts' forecasts for an easing to 1.3 percent.
Inflation is now well below the Bank of England's 2 percent
target, as a result sterling fell against a basket of
currencies.
(Editing by Greg Mahlich)
