FTSE down 1.2% by midday as miners, banks drag

                                
 By Dominic Lau
                                
 LONDON, May 20 (Reuters) - Britain's top share index fell
1.2 percent by midday on Tuesday, snapping a four-day winning
run, as miners gave up recent gains and banks remained under
pressure on the glum mood in the sector.
                                
 By 1017 GMT, the FTSE 100 <.FTSE> was down 75.8 points at
6,300.7, after gaining 1.2 percent on Monday. The UK's blue-chip
index has risen 16 percent since March 17 when it hit the year's
low, but is still down 2.4 percent in 2008.
                                
 "We have done pretty well since the lows of March. This
could go all the way back up again but we need to take a
breather for maybe a week or so and then we will regroup and
find out if there is more momentum to come to the upside," said
Tom Hougaard, chief market strategist at City Index Markets.
                                
 Miners shaved 43 points off the index, with BHP Billiton
<BLT.L>, Rio Tinto <RIO.L>, Anglo American <AAL.L>, Xstrata
<XTA.L>, Vedanta Resources <VED.L>, Kazakhmys <KAZ.L>, Lonmin
<LMI.L> and Eurasian Natural Resources <ENRC.L> losing between 3
and 5.7 percent.
                                
 "The basic resources sector is the best and only positive
sector since the beginning of the year ... the sector has moved
away from its uptrend recently and another short-term correction
is highly possible," broker Collins Stewart said in a note,
advising clients to take profits for now.
                                
 Banks also weighed as Royal Bank of Scotland <RBS.L>, HSBC
<HSBA.L>, HBOS <HBOS.L>, Lloyds TSB <LLOY.L> and Standard
Chartered <STAN.L> were down 0.2 to 1.3 percent.
                                
 Barclays <BARC.L> shed 1 percent after the Daily Telegraph
said Britain's third-biggest bank was considering making a
takeover bid for a rival and could try to buy an investment bank
as part of a move to raise capital from shareholders. Barclays
was not immediately available to comment.
                                
 A price target cut from UBS also weighed on Barclays.
                                
 AstraZeneca <AZN.L> advanced 1.5 percent on hopes it may
prevail in a U.S. court case over patents on its blockbuster
schizophrenia drug Seroquel after the hearing was brought
forward to Tuesday from June 4. [ID:nL20748398]
                                
 Rival GlaxoSmithKline <GSK.L> put on 1.3 percent.
                                
 Oil shares eased, with heavyweights BP <BP.L> down 0.8
percent, Royal Dutch Shell <RDSa.L> off 0.3 percent and gas
producer BG Group <BG.L> dipping 0.7 percent.
Among mid-caps, Yell Group <YELL.L> dived 22 percent after
the British-based classified advertising directories firm said
it was halving its final dividend payment to shareholders due to
an uncertain economic outlook. [ID:nL20192611]
                                
 IMPERIAL TOBACCO A DRAG
                                
 Marks & Spencer <MKS.L> dropped 5.3 percent after the
retailer said its annual profits hit 1 billion pounds but cut
its staff bonus and warned a slowdown in consumer spending could
run until autumn 2009. [ID:nL20502491]
                                
 Imperial Tobacco <IMT.L> lost 2.8 percent after the world's
fourth-largest cigarette group launched a deeply discounted 4.9
billion pounds rights issue to pay for its recent Altadis
acquisition. The group also reported an 18 percent rise in
half-year earnings. [ID:nL20464420]
                                
 ICAP <IAP.L>, the world's biggest interdealer broker, shed
4.6 percent despite posting a 31 percent rise in adjusted pretax
profit for the year ended March, after gaining nearly 12 percent
in the previous four sessions. [ID:nL19479996]
                                
 British Land <BLND.L> advanced 1.3 percent after the
property company said a decline in property values has slowed so
far this year and there are increasing signs of investor
interest at current levels, although sentiment remains volatile.
[ID:nL20545301]
                                
 Mitchells & Butlers <MAB.L> added 1.8 percent. The British
pubs operator said it planned to convert to a real estate
investment trust (REIT) to fully realise the value of its
property estate when market conditions are "suitable".
[ID:nL20531998]
 (Additional reporting by Michael Taylor; editing by David
Hulmes)