* FTSE down 0.7 percent ahead of U.S. non-farm payrolls
* Energy stocks retreat as crude falls below $70 barrel
* Miners stocks weakened by cheaper metal prices
* Broad retreat; drugmakers, life insurers lose ground
By David Brett
LONDON, July 2 (Reuters) - Britain's top share index was
down 0.7 percent at midday on Thursday, as equities fell
broadly, led lower by energy and mining stocks which fell on
retreating commodity prices ahead of key U.S. payrolls data.
Energy companies, which gained in the previous session
tracking higher oil prices, took most points off the index as
crude dipped back below $70 per barrel <CLc1>.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L> and
Tullow Oil <TLW.L> fell 0.9-1.7 percent.
At 1022 GMT, the blue chip index was 31.66 points lower at
4,390.05, after closing 91.50 points higher on Wednesday at
4,340.71 on the first day of the new quarter.
"Investors looked to profit take from yesterday's rally,
with the energy and miners taking the brunt of the selling,"
said Joshua Raymond, Market Strategist at City Index.
U.S. FOCUS
Traders will be focused on the United States this afternoon,
with all the attention on non-farm payrolls data, bought forward
a day from Friday this month due to the Independence Day
holiday, as investors look for further direction.
Forecasters expected the figure to come in with a fall of
355,000 in June, after May's 345,000 decline, while U.S.
unemployment was estimated to rise to 9.6 percent last month, up
from 9.4 percent in May.
"I certainly think unemployment will continue to rise over
the next few months and maybe into next year, and this will
bring its own negative impact on aggregate demand,"
Batstone-Carr said.
Investors will also have the latest weekly U.S. jobless
claims, May factory goods, and revised durable orders numbers to
digest on Thursday.
And news out of the latest monthly European Central Bank
Committee meeting will also be eyed, though no change is
expected to monetary policy with euro zone interest rates
already at a record low.
Miners dipped, shedding some of recent gains made on
corporate activity speculation, as stocks were hit lower metal
prices, with investors unsure over the speed of economic
recovery.
Randgold Resources <RRS.L>, Eurasian Natural Resources
<ENRC.L>, Anglo American <AAL.L>, Lonmin <LMI.L> and BHP
Billiton <BLT.L> fell 1.1-2.5 percent.
Rio Tinto fell 1.8 percent after a $15.2 billion rights
offer, the fifth-biggest on record, putting the world's top iron
ore miner back into growth mode after a debt-funded purchase of
Alcan had brought it to its knees. []
The dip in equity prices was broad-based with defensive
drugmakers and life insurers also among those well into negative
territory.
AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L> and Shire
<SHP.L> fell 0.8 to 1.5 percent while Aviva <AV.L> lost 2.6
percent and Legal & General slipped 0.8 percent.
With little in the way of positive news, the world's biggest
spirits group Diageo <DGE.L> topped the risers chart, up 2.5
percent, as traders continued to view its decision, announced on
Wednesday, to close two Scottish plants as a good move in the
current downturn. []
Standard Chartered rose 1.3 percent after the Asia-focused
bank announced John Peace as its permanent chairman, and UBS
upgraded its rating to 'neutral' from 'sell', while hiking its
target price to 1,140 pence from 1,000 pence and upping its
estimates.
(Editing by Dan Lalor)
