* FTSE down 0.5 percent, off earlier lows
* Miners knocked by weak metal prices on demand worries
* Oils up as BP bounces on Gulf spill containment success
By Jon Hopkins
LONDON, June 7 (Reuters) - Weak miners weighed on Britain's
leading shares at midday on Monday as metal prices retreated
after disappointing U.S. jobs data on Friday, although rallying
oils and banks helped pare earlier falls.
At 1144 GMT, the FTSE 100 <> index was down 23.36
points, or 0.5 percent at 5,102.64, recovering from a session
low of 5,040.26, having shed 1.6 percent on Friday.
"Investors are grappling with their natural tendencies to
stock pick when equities turn sharply weaker and the continued
uncertainty over sovereign debt and the storm clouds that lie
ahead for the consumer," said Joshua Raymond, market strategist
at City Index.
Miners were the main drag on blue chips as base metal prices
took a hit on demand concerns, with copper hitting an
eight-month low after the disappointing U.S. jobs reports and
euro zone debt concerns cast a pall on global economic health.
Kazakhmys <KAZ.L>, Eurasian Natural Resources <ENRC.L>, Rio
Tinto <RIO.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L> and
BHP Billiton <BLT.L> shed 0.7 to 1.2 percent.
Randgold Resources <RRS.L>, however, bucked the sector
trend, adding 0.9 percent, with the stock a proxy for the gold
price <XAU=> as the price of the yellow metal bounced from lows.
The main FTSE 100 gainer was oil major BP <BP.L> which
rebounded 2.2 percent higher having lost around a third of its
value since a rig explosion in the Gulf of Mexico last month led
to an oil spill which has caused an environmental disaster.
BP said its containment cap is capturing an increasing
amount of oil spewing from the ruptured Gulf of Mexico well.
[]
Heavyweight BP's gain put the integrated oil sector into
positive territory overall, although all the other stocks were
weaker with the crude price <CLc1>. Royal Dutch Shell <RDSa.L>,
BG Group <BG.L>, Cairn Energy <CNE.L>, and Tullow Oil <TLW.L>
lost 0.2 to 1.3 percent.
Similarly, gains from global banking giant HSBC <HSBA.L>, up
0.7 percent, and emerging markets peer Standard Chartered
<STAN.L>, ahead 0.1 percent, helped the banking sector higher
overall, although the UK-focused banks stayed weak.
Lloyds Banking Group <LLOY.L>, Barclays <BARC.L> and Royal
Bank of Scotland <RBS.L> fell 0.1 to 1 percent on worries over a
levy on British lenders and concerns over euro zone debt
exposure.
British finance minister George Osborne is planning to slap
a punishing new tax on banks despite the failure of global
finance chiefs to agree on a universal levy on financial firms,
the Daily Mail said on Monday.
Meanwhile, the euro zone's debt problems continued to haunt
markets after Hungary's government said on Friday the country
might suffer a Greece-style debt crisis. However, the chairman
of the group of euro zone finance ministers, Jean-Claude
Juncker, dismissed these concerns on Sunday.
RSA RALLIES
Among other financials, composite insurer RSA Insurance
<RSA.L> rose 1.8 percent after Goldman Sachs upped its rating
for the firm to "buy" from "neutral".
But life insurers were weak, with Legal & Generall <LGEN.L>
off 0.8 percent after Deutsche Bank cut its target price in a
review of the European life sector, while Prudential <PRU.L>
fell 0.1 percent as it held its annual general meeting.
In an effort to appease shareholder anger over its failed
bid for AIG's <AIG.N> AIA Asian unit, Prudential said in a
trading update on Monday that its sales in April and May were up
28 percent. []
Market heavyweight Vodafone <VOD.L>, down 1.4 percent,
knocked the most points off the blue chip index as the mobile
phones operator said it had filed an appeal against an $2.56
billion Indian tax bill. []
(Editing by David Cowell)
