FTSE drops 2 pct; miners, banks under pressure

                                
 * Sentiment hit by weak U.S. consumer confidence on Friday
                                
 * Japan's GDP figures disappoint some investors
                                
 * Miners, banks hardest hit
                                
 By Tricia Wright
                                
 LONDON, Aug 17 (Reuters) - Britain's top share index fell 2
percent in midday trade on Monday amid concerns over the pace of
global recovery, after unexpectedly weak U.S. consumer
confidence data on Friday, and as Japan's GDP figures
disappointed some investors.
                                
 By 1101 GMT, the FTSE 100 <.FTSE> was down 92.66 points at
4,621.31, extending losses from Friday when the index shed 0.9
percent.
                                
 "We're seeing a little bit of follow-through from the U.S.
consumer confidence figures on Friday that saw the market
weaken," said Keith Bowman, analyst at Hargreaves Lansdown.
                                
 U.S. stocks looked set for further falls on Monday, with
index futures <SPc1>, <DJc1>, <NDc1> all down around 2 percent,
reflecting the fresh declines in Europe and Asia.
                                
 For more on U.S. consumer confidence, double click on
[ID:nN14304812]
                                
 "Although we did see an improvement in GDP figures in Japan,
that was a little bit below expectation, so that's also taken
away a little bit from sentiment," said Bowman.
                                
 Data showed Japanese gross domestic product grew 0.9 percent
in April-June, slightly short of a median market forecast of a
1.0 percent increase. [ID:nT212505].
                                
 Miners took the most points off the index on demand concerns
sparked by worries over economic recovery, with Rio Tinto
<RIO.L>, Kazakhmys <KAZ.L>, Antofagasta <ANTO.L> and Lonmin
<LMI.L> down between 4.4 percent and 5.5 percent.
                                
 The China Iron and Steel Association (CISA) said it would
negotiate with the three top iron ore miners using a price it
agreed with Australian miner Fortescue Metals Group <FMG.AX> as
a reference. [ID:nPEK317955] 
                                
 However, Australia's largest miner Rio Tinto said it does
not see a price pact between Fortescue Metals and China's
largest steelmaker Baosteel as establishing an industry-wide
price. [ID:nSYA006086]
                                
 Xstrata <XTA.L> was the top blue chip faller, down 5.8
percent with the miner reported to have redoubled its attempt to
win over the investors of its rival and merger target Anglo
American <AAL.L>, the Guardian newspaper said on Monday.
                                
 Anglo American shares shed 5.5 percent.
                                
 Fresnillo <FRES.L> shed 2.6 percent after the world's
largest primary silver producer posted a 14 percent decline in
first-half profit due to lower silver prices, but remained
positive for the full year. [ID:nL0384011]
                                
Banks were also lower as investors cut back on risky
positions. HSBC <HSBA.L>, Lloyds Banking Group <LLOY.L> and
Standard Chartered <STAN.L> were down between 2.1 and 3.3
percent.
                                
 Royal Bank of Scotland <RBS.L> shed 2.6 percent after the
lender said Britain's financial regulator has launched a
supervisory review of the Scottish bank's takeover of ABN Amro.
[ID:nLG166348]
                                
 Barclays <BARC.L> was down 3.3 percent. Barclays is
attempting to recruit five JP Morgan <JPM.N> investment bankers
with a bonus package worth a total of 30 million pounds ($49.16
million), the Sunday Telegraph reported, without citing sources.
[ID:nLG213686]

                                
 SOLE BLUE CHIP GAINER
                                
 Aviva <AV.L> was the only blue chip riser at midday, up 1.9
percent after HSBC upgraded the insurer to "neutral" from
"underweight" and raised its price target to 400 pence from 320
pence.
                                
 Domestic economic news was thin on the ground.
                                
 Asking prices for homes in England and Wales are on average
3.1 percent lower this month than a year ago, property web site
Rightmove said.
                                
 That matched July's annual fall, but a monthly decline of
2.2 percent this month more than reversed July's 0.6 percent
rise from June, leaving the average price of a home at 222,767
pounds. [ID:nLE591829]
                                
 Britain's economy should return to growth in the second half
of 2009, although the speed of recovery will depend on the
effect of bank lending constraints and the state of the global
economy, BoE policymaker Andrew Sentance said in an article for
the Sunday Times newspaper [ID:nLG224287] 
                                
 Investors were looking ahead to the afternoon release of the
U.S. Empire State index for August, which is expected to rise to
1.00, up from -0.55 in July.
                                
 The U.S. NAHB housing market index for August is also due
later on Monday, with economists expecting a reading of 18, up
from 17 in July.
 (Editing by Rupert Winchester)