* FTSE 100 down 1.6 percent
* Energy, mining stocks fall with oil, metals prices
* Retailers gain after sales data beats expectations
(For more on the financial crisis, click on [])
By Nick Vinocur
LONDON, Nov 20 (Reuters) - Britain's top share index was
down 1.6 percent by midday on Thursday, as dire forecasts for
the U.S. economy led to sharp falls in commodity prices, denting
energy and mining companies.
By 1158 GMT the FTSE 100 <> had fallen 62.41 points to
3,943.03, after falling 4.8 percent on Wednesday.
In the U.S., the Federal Reserve slashed its economic growth
forecasts and consumer prices fell at a record pace last month,
while Japan's October exports fell at their fastest pace in
seven years.
The news heightened fears that demand for energy and
commodities would slump, sending crude <CLc1> down for a fifth
consecutive session to below $53, as weaker metal prices put
more pressure on miners.
BP <BP.L>, Royal Dutch Shell, <RDSa.L> and Cairn Energy
<CNE.L> fell between 0.3 and 5.9 percent while miners Eurasian
Natural Resources <ENRC.L> Anglo American <AAL.L> and Xstrata
<XTA.L> lost between 2.1 and 7.1 percent.
"We are having a downturn in the UK today after having got
back to a sense of relative normality in earlier sessions. Weak
data from the U.S. is the main catalyst," said CMC Markets
analyst James Hughes.
"Commodity and oil prices are really hurting, and miners are
so heavily weighted that it's pulling the index down. But we're
seeing some better retail sales and that's going to help since
they've been under so much pressure lately," he added.
UK retailers saw some relief after monthly data showed sales
falling less than expected in October despite a decline in
discretionary spending. []
Europe's biggest home improvement firm Kingfisher <KGF.L>,
clothes and food retailer Marks & Spencer <MKS.L> and fashion
and homewares store group Next <NXT.L> all rose between 2.1 and
4.3 percent after suffering in the previous session.
Banks were under pressure after a 23 percent drop in the
share price of U.S. banking giant Citi jolted already anxious
investors and sent shockwaves through global markets.
Barclays <BARC.L> fell 2.4 percent, with shareholder
discontent over the bank's controversial fundraising plan
continuing to dent the stock. HSBC <HSBA.L> fell 1.5 percent,
adding to hefty losses the previous session.
Life insurers were down sharply, tracking falls in their
U.S. counterparts the previous session with analysts pointing to
continued selling by mutual funds.
Aviva <AV.L> was the index's heaviest loser, sliding 14.3
percent, while Prudential <PRU.L> lost 9.8 percent and Legal &
General <LGEN.L> lost 9 percent.
Other financial stocks were also heavy losers with falling
equity prices contributing to an 5.8 percent fall for Schroders
<SDR.L>.
Still, the prospect of government bailout money lifted some
banking stocks.
Royal Bank of Scotland <RBS.L> jumped 11.6 percent ahead of
a shareholder vote on its plan to raise capital from the UK
government while Lloyds TSB <LLOY.L> gained 8.5 percent, its
shareholders having approved on Wednesday a similar plan and its
proposed takeover of HBOS <HBOS.L>.
(Editing by Greg Mahlich)
