* Oils weak with crude price
* Miners hit by global demand concerns
* Defensive stocks in demand, led by drugs
By Jon Hopkins
LONDON, Feb 24 (Reuters) - Britain's top share index fell
0.8 percent by midday on Tuesday, weighed down by weakness in
commodity issues as concerns about the costs on the global
economy of rescuing the financial sector stoked demand concerns.
By 1149 GMT, the FTSE 100 index <> was 31.86 points
lower at 3,818.87, having ended down 38.33 points at 3,850.73 in
the previous session. The index closed below the 4,000 mark for
the first time in three months on Friday.
"It's more of the same, we've had a steady grind lower and
that's because there's a lack of certainty over everything,
whether it be corporate earnings, data or the banks and recent
announcements have not added any clarity," said Jonathan
Jackson, head of equities at Killik & Co.
Weakness in heavyweight energy stocks was the main drag on
blue chip sentiment as crude prices held about $38 a barrel on
growing economic worries.
BG Group <BG.L>, Royal Dutch Shell <RDSa.L>, Cairn Energy
<CNE.L>, lost between 0.8 percent and 2.2 percent.
Miners suffered as well, with metal prices under pressure on
demand concerns. Rio Tinto <RIO.L>, BHP Billiton <BLT.L>,
Xstrata <XTA.L>, Antofagasta <ANTO.L> and Vedanta Resources
<VED.L> down between 2.6 percent and 5.1 percent.
Life insurers also saw big falls with capital raising
concerns continuing to weigh on the sector as equity market
valuations drop back again.
Legal & General <LGEN.L>, which recently denied it plans to
launch a rights issue was the top FTSE 100 faller, down 7.4
percent, while Prudential <PRU.L> shed 6.2 percent, and Aviva
<AV.L> lost 5.3 percent.
Banks were back under pressure as an early rally in tandem
with an overnight bounce by U.S. banks soon faded.
Lloyds Banking Group <LLOY.L>, Barclays <BARC.L>, Standard
Chartered <STAN.L>, and HSBC <HSBA.L> all fell between 0.7
percent and 4.1 percent.
Only Royal Bank of Scotland <RBS.L> held on to gains, up 0.9
percent ahead of results, due this Thursday, on hopes the group
could create a ring-fenced division for its unwanted assets.
The United States on Monday vowed to prop up ailing banks if
needed, even as a Federal Reserve official urged that such
interventions should be short term.
U.S. stock futures pointed to a mixed start on Wall Street
on Tuesday following a slump to 12-year lows on Monday.
U.S. President Barack Obama will deliver his first address
to Congress at 9 p.m. EST (0200 GMT on Wednesday), while Federal
Reserve chief Ben Bernanke delivers the Fed's semi-annual
monetary policy report to Congress, starting at 1500 GMT.
DRUGS WORKING
Drugmakers moved higher with investors seeking some safer
havens for their cash as worries over the global economy mount
up. AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L>, and Shire
<SHP.L> took on between 1.1 percent and 2.0 percent.
Among other blue chip gainers, outsourcing company Serco
Group <SRP.L> took on 2.8 percent as Merrill Lynch upped its
rating to "buy" from "neutral" on valuation grounds ahead of
upcoming results.
Thomson Reuters <TRIL.L> was also the top FTSE 100 riser, up
2.7 percent ahead of the media group's full-year results, due
this afternoon.
Elsewhere in the media sector, Pearson <PSON.L> added 1.1
percent, helped by a target price upgrade from Deutsche Bank,
and Reed Elsevier <REL.L> gained 0.9 percent.
British retail sales fell at a much slower pace than
expected in February, but retailers are shedding staff at a
record pace, a survey showed on Tuesday.
The Confederation of British Industry's distributive trades
survey balance rose to -25, its highest since June 2008, from
-47 in January and a series low of -55 in December. Analysts had
predicted a reading of -52.
(Editing by Andrew Macdonald)
