* Miners decline on softer metals prices
* Banks down; Lloyds Banking falls on report of cash-raising
* Energy stocks up as BP makes giant oil find, crude gains
By Tricia Wright
LONDON, Sept 2 (Reuters) - Banks and miners suffered as
Britain's leading share index fell 0.2 percent by midday on
Wednesday, while energy stocks were in demand after oil major BP
made a "giant" oil find and as crude prices edged up.
By 1047 GMT, the FTSE 100 <> was down 8.59 points at
4,811.11, extending declines from Tuesday when the index shed
1.8 percent, and following on from weakness on Wall Street and
in Asia overnight.
"(The falls have) come a little harder and in a way faster
than I imagined; I thought it would be a slightly slower process
in the first 10 days of September but we went down with a bang
yesterday," said Howard Wheeldon, strategist at BGC Partners.
"It's actually based on a little bit of fear creeping in
that we have been running ahead of ourselves on the expectation
that this recession, the global recession is over," he said.
Britain's blue-chip index rose 6.5 percent in August, and is
up 39 percent since hitting its lowest level in over six years
in March.
Mining stocks took the most points of the index, under
pressure against a background of softer metals prices, with
Antofagasta <ANTO.L>, Lonmin <LMI.L>, Kazakhmys <KAZ.L> and Rio
Tinto <RIO.L> down 1.6-4.3 percent.
Banks were out of favour after uncertainty over financial
companies' health battered U.S. peers overnight.
Lloyds Banking Group <LLOY.L> was the hardest hit in the
sector, down 5.6 percent, while Royal Bank of Scotland <RBS.L>,
Barclays <BARC.L> and Standard Chartered <STAN.L> shed 1.1-3.6
percent.
Britain's Guardian newspaper reported that Lloyds has won
backing from its investors to raise 10 billion pounds to reduce
its dependence on the taxpayer. []
Also among financials, life insurers were weaker, with Legal
& General <LGEN.L>, Aviva <AV.L>, Old Mutual <OML.L> and
Prudential <PRU.L> off between 2.5 and 5.6 percent.
Ex-dividend factors knocked 2.79 points off the FTSE 100
index, with BHP Billiton <BLT.L>, Capita <CPI.L>, Friends
Provident <FP.L>, Serco <SRP.L>, L&G and TUI Travel <TTG.L> all
losing their payout attractions.
BP BOOSTED
Energy stocks gained after BP <BP.L> made a "material" oil
discovery in the Gulf of Mexico [] and as crude
<CLc1> climbed above $68 a barrel after falls the previous
session.
BP added 2.2 percent, while BG Group <BG.L> rose 0.2
percent, though declines were seen elsewhere in the sector, with
Royal Dutch Shell <RDSa.L> and Tullow Oil <TLW.L> down 0.2 and
2.3 percent respectively.
Retailers were in demand as Banc of America-Merrill Lynch
reinstated coverage on 10 general retail stocks as it launched
combined coverage of the food and general retail sector.
Wm. Morrison <MRW.L>, which was among the broker's top UK
sector picks, put on 2.5 percent, while Tesco <TSCO.L> gained
0.9 percent and Sainsbury <SBRY.L> rose 0.8 percent.
Tobacco stocks also found favour, benefiting from their
defensive status amid concerns the strong summer rally is
running out of steam, with British American Tobacco <BATS.L> up
1.2 percent and Imperial Tobacco <IMT.L> 1.3 percent firmer.
Investors' attention this afternoon will be drawn across the
Atlantic, notably to the publication of minutes from the last
Federal Reserve's policy meeting of August 11-12 due at 1800
GMT.
Among a swathe of other U.S. data are July factory orders,
revised July durable goods orders and the August ADP National
Employment survey, ahead of Friday's August U.S. jobs report.
(Editing by David Cowell)
