* FTSE 100 down 2.0 percent, below 5,000 level
* Banks, commodity stocks among heaviest fallers
* Debt worries, growth fears revive risk aversion
By David Brett
LONDON, June 29 (Reuters) - Britain's top shares fell
sharply on Tuesday as renewed fears over global growth and
worries about Europe's debt problems hit risk appetite, sending
commodity-linked assets and banks sharply lower.
By 1042 GMT, the FTSE 100 <> was down 98.85 points, or
2.0 percent, at 4,972.83, and on course for its worst quarterly
performance in 18 months.
"Considering how many times the FTSE 100 has retested levels
between 4,900 and 5,000 since September last year, there is
clearly a battle going on between those investors who feel
stocks are worth buying at these levels and those that believe
stock values have outgrown the wider economic recovery," Joshua
Raymond, market strategist at City Index said.
Miners tracked falls in base metal prices, with Rio Tinto
<RIO.L> and Eurasian Natural Resources <ENRC.L> down 4.4 percent
and 4.2 percent respectively.
Investors were shaken after Japanese industrial output fell
0.1 percent in May, suggesting the benefits of a rebound in
exports to fast-growing Asian economies may be moderating.
And jitters mounted ahead of bank repayments to the European
Central Bank this week. Banks must repay 442 billion euros ($546
billion) to the European Central Bank on Thursday, leaving a
potential liquidity shortfall in the financial system of over
100 billion. []
These concerns and worries over governments moves to try and
solve the debt problems by cutting government spending, boosted
the dollar and added to the pressure on metals prices ahead of
what are expected to be weak U.S. non-farm payrolls at the end
of the week. []
BEAR BANKS
Banks were lower as concerns about debt exposure returned.
Barclays <BARC.L> was a standout loser, down 3.0 percent, while
sector heavyweight HSBC <HSBA.L> fell 2.5 percent.
The British blue-chip index is down over 12 percent so far
this quarter, its worst such fall since the fourth quarter of
2008 when it fell 12.9 percent in the wake of the collapse of
Lehman Brothers.
Technical analysts said the index was close to breaching
support levels that could lead to a much bigger retreat.
"Note that 4,927 is 38 percent Fibonacci retracement support
from March 2009 low to 2010 high, so a weekly close below here
should really tip the balance and send the index plunging," said
Nicole Elliott, technical analyst at Mizuho Corporate Bank.
Energy stocks were a big drag on the index as crude prices
fell back towards $76 per barrel <CLc1>.
Troubled oil major BP <BP.L> fell 1.7 percent, with Tropical
Storm Alex set to strengthen into a hurricane on Tuesday,
delaying the company's efforts to increase siphoning capacity at
the gushing oil well in the Gulf of Mexico.
Vodafone <VOD.L> fell 2 percent as Credit Suisse cut its
rating to "neutral" from "underperform" with an unchanged 160
pence price target, citing recent outperformance by the mobile
telecoms group's stock.
Support services group Serco <SRP.L> fell 2.1 percent, along
with the market, despite saying it was on track for strong
revenue growth in 2010, and predicting its future performance
would benefit from client demand for efficiency amid a state
spending squeeze in Britain. []
(Editing by Dan Lalor)
