* FTSE down 0.3 pct
* Old Mutual slides as HSBC pulls out of Nedbank bid
* Life insurers weighed by Citigroup note
By David Brett
LONDON, Oct 15 (Reuters) - Britain's top shares were lower
around midday on Friday, led down by Old Mutual, which fell
after HSBC ended talks to pay $8 billion for a majority stake in
South African lender Nedbank <NEDJ.J> from the insurer.
HSBC <HSBA.L> had been in exclusive talks with Anglo-South
African insurer Old Mutual <OML.L> to buy up to 70 percent of
South Africa's fourth-largest bank. []
Old Mutual, which shed 6.5 percent, said HSBC had not told
it why it withdrew.
"It's disappointing. The share price has gone up in the
expectation that this thing was going out the door, and it's no
surprise to see it coming back again," Oriel Securities analyst
Marcus Barnard said.
Sector peers were also under pressure as Citigroup
downgraded the UK life insurance sector to "underweight" from
"neutral" in a strategy note, with Standard Life <STAN.L> and
Legal and General <LGEN.L>, off 2.6 and 1.4 percent,
respectively.
By 1033 GMT, the FTSE 100 <> was down 18.00 points, or
0.3 percent, at 5,709.21, having closed 0.4 percent lower on
Thursday at 5,727.21.
Miners <.FTNMX1770> were also weaker as investors locked in
gains from the previous two sessions.
African Barrick Gold <ABGL.L> was down 1.0 percent having
cut its 2010 production target for the second time in three
months on Thursday.
RALLYING BANKS
Banks <.FTNMX8350>, the heaviest fallers on Thursday on
worries about possible cash raisings after Standard Chartered
<STAN.L> announced a $5.3 billion on Wednesday, recovered,
adding the most points to the index.
HSBC was up 0.3 percent, while the sector was led higher by
Royal Bank of Scotland <RBS.L>, up 1.9.
Investors were awaiting a speech from U.S. Federal Reserve
Chairman Ben Bernanke at the Boston Fed on Friday, which could
provide clues on the Fed's next policy steps to boost growth in
the World's biggest economy.
Financial markets, which widely expect the U.S. central bank
to begin a new program of buying longer-term U.S. Treasury
securities at its Nov. 2-3 meeting, will look for clues about
the scope of the programme. []
Wall Street futures were pointing to a mixed open on Friday,
ahead of the speech and a welter of U.S. pointers, including
September consumer prices and retail sales numbers, and
October's Empire State Index and University of Michigan consumer
sentiment indexes.
"It's now a question of the potential next round of QE
(quantitative easing) being formalised by the States and
potentially in the UK as well, but until such time as that
happens, there's still an element of nerves around whether the
next QE programme will actually be successful," said Richard
Hunter, head of UK equities at Hargreaves Lansdown.
Elsewhere, aircraft engine maker Rolls-Royce <RR.L> rose 1.1
percent, after Goldman Sachs upgraded the firm to "buy" from
"neutral".
Mid cap Belgium-based gearbox maker Hansen Transmissions
<HSNT.L> jumped 10.2 percent after it received a 75 million-euro
offer for its industrial gearbox unit from Japan's Sumitomo
Heavy Industries <6302.T>, and planned to focus solely on wind
energy. []
(Editing by Karen Foster)
