* FTSE 100 slumps 8.2 pct by midday
* Financials top-weighted losers
* Commodity stocks down on global recession fears
(For more on the financial crisis, click on [])
By Dominic Lau
LONDON, Oct 10 (Reuters) - Britain's top share index slid
8.2 percent by midday on Friday in a global sell-off in equities
as investors feared government efforts to unclog liquidity
strains would not avert a global recession.
By 1035 GMT, the FTSE 100 <> was down 352.6 points at
3,961.2, below 4,000 for the first time in more than five years
but above an early low of 3,874.0.
There was no gainer on the UK benchmark, which has lost more
than 20 percent this week and is on track for its worst weekly
loss since October 1987.
Banks were the top-weighted losers, with the FTSE 350 banks
index <.FTNMX8350> shedding more than 11 percent.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, HSBC
<HSBA.L>, HBOS <HBOS.L>, Lloyds TSB <LLOY.L> and Standard
Chartered <STAN.L> were down between 8.7 and 21.7 percent.
Wall Street plunged for a seventh straight session on
Thursday as investors bet recent moves by authorities worldwide
to thaw frozen credit markets would not be enough to avert a
global recession. U.S. stock futures pointed to a sharply weaker
start on Friday.
In Asia, Japan's Nikkei average <> slumped 9.6 percent
-- its biggest one-day loss since the 1987 stock market crash.
"I am tempted to start buying some quality stocks which I
think are particularly cheap at the moment, the likes of Smith &
Nephew <SN.L> for example," said Tim Whitehead, head of
portfolio services at Redmayne-Bentley.
"But it will be interesting to see how this auction develops
with the credit default situation with regards to Lehman
Brothers in America and what the implications will be for the
counterparties."
An auction to settle credit default swaps protecting the
debt will be one of the largest settlements of contracts in the
$55 trillion market, with around $400 billion in contract
volumes estimated on Lehman's debt.
Whitehead said it was a good idea to keep cash levels
reasonably high even though the FTSE 100 was below the 4,000
level, as the index may fall further.
Other financials also suffered, with London Stock Exchange
<LSE.L> sinking 7.9 percent, insurers Old Mutual <OML.L>,
Prudential <PRU.L> and Standard Life <SL.L> losing 8.1 to 11.8
percent, and hedge fund Man Group <EMG.L> down 3 percent.
FALLING METALS AND CRUDE
Heavyweight energy stocks were the second-worst performing
sector as crude prices <CLc1> fell below $82 a barrel. BP
<BP.L>, Royal Dutch Shell <RDSa.L>, BG Group and Cairn Energy
<CNE.L> sagged between 6.3 and 8.4 percent.
Miners sank along with weaker metal prices, with BHP
Billiton <BLT.L>, Rio Tinto <RIO.L>, Anglo American <AAL.L>,
Xstrata <XTA.L>, Antofagasta <ANTO.L>, Vedanta Resources <VED.L>
and Eurasian Natural Resources <ENRC.L> dropping between 6 and
14.6 percent.
Retailers were another heavy casualty. Marks & Spencer
<MKS.L>, Next <NXT.L>, Kingfisher <KGF.L>, Tesco <TSCO.L> and
Sainsbury <SBRY.L> sagged between 6.3 and 8.5 percent.
"It's just paralytic fear," said Manus Cranny at MF Global
Spreads.
Even stocks normally deemed defensive also took a whipping,
with Vodafone <VOD.L>, AstraZeneca <AZN.L>, GlaxoSmithKline
<GSK.L>, British American Tobacco <BATS.L>, BT Group <BT.L> and
Imperial Tobacco <IMT.L> shedding 6.6 to 12.7 percent.
(Editing by Quentin Bryar)
