* Banks weak ahead of G20 summit
* BoE's King urges caution on recovery
* LSE big blue-chip faller after update
By Tricia Wright
LONDON, Sept 24 (Reuters) - Britain's top share index fell
0.3 percent by midday on Thursday, led lower by banking stocks
with investors cautious ahead of the outcome from the latest
Group of 20 leaders' meeting.
At 1126 GMT, the FTSE 100 <> was down 14.11 points or
0.3 percent at 5,125.65, having closed 0.1 percent down on
Wednesday.
"The FTSE is struggling to break above the 5,200 level and
over the last week or so we've simply been range trading," said
Joshua Raymond, market strategist at City Index.
Banks took the most points off the index, with heavyweight
HSBC <HSBA.L> down 1 percent, while Standard Chartered <STAN.L>
lost 1.6 percent and Royal Bank of Scotland <RBS.L> fell 0.2
percent.
"I would imagine that ... investors in the banking
institutions that have had to take and still hold money from the
central government, or the central bank as such, then in that
case one would probably need to be very cautious," said Stephen
Pope, chief global market strategist at Cantor Fitzgerald.
Bank of England Governor Mervyn King urged caution as
Britain's economy enters the recovery stage.
He asked for people not to get too carried away, warning any
improvement is likely to be small compared to the sharp drop in
output caused by the global financial crisis, in an interview
published on Thursday. []
London Stock Exchange <LSE.L> was a top blue-chip faller,
down 3.4 percent as the bourse operator issued a trading update
indicating the firm is losing market share. []
Private equity firm 3i <III.L> fell 3.5 percent after it
doused hopes that the stock market rally would quickly feed
through into the value of its assets. []
British Airways <BAY.L> fell 2.9 percent as Citigroup cut
its recommendation on the airline to "hold" from "buy".
A note by UBS on the European airline sector also weighed on
BA, with the broker saying the negative trends in the industry
will reverse only in 2010.
OILS LIMIT LOSSES
Energy stocks were higher, helping to limit the FTSE 100's
losses, with gains seen in the sector after Wednesday's sharp
falls, with crude prices <CLc1> over $68 a barrel.
Royal Dutch Shell <RDSa.L> climbed 1 percent, while BP
<BP.L> rose 0.4 percent.
Strength was also seen among some miners after a retreat the
previous session, as gold <XAU=> ticked higher supported by
recent dollar weakness.
Randgold Resources <RRS.L> climbed 1.3 percent, while
Fresnillo <FRES.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L> and
Lonmin <LMI.L> added 0.4 to 1.3 percent.
Positive broker comment boosted Autonomy <AUTN.L>, up 1.5
percent, with Banc of America-Merrill Lynch lifting its target
price for the software firm to 1,900 pence from 1,660, saying
the company's cyclical exposure is underestimated. []
The stock was also lifted by renewed market talk that
Microsoft <MSFT.O> may bid for the company, with a price of
2,800 pence a share mentioned.
Imperial Tobacco <IMT.L>, up 1.2 percent, was buoyed as
Evolution Securities lifted its target price for the cigarette
group to 2,100 pence from 1,950, while repeating its "buy"
recommendation on the stock.
The Fed on Wednesday upgraded its assessment of the U.S.
economy, saying growth had returned after a deep recession,
while reiterating its promise to hold interest rates very low
for a long time. []
Investors will be keeping a close eye on U.S. weekly jobless
claims at 1230 GMT and U.S. existing home sales figures for
August at 1400 GMT.
(Editing by Jon Loades-Carter)
