* FTSE 100 down 7 percent, back below 4,000
* Commodity falls hit energy, miners
* Banking, financial stocks slide again
(Click on [] for more on the financial crisis)
By Simon Falush
LONDON, Oct 24 (Reuters) - Britain's top share index tumbled
7 percent, touching its lowest in 5-1/2 years by midday on
Friday, headed by energy stocks as weak growth data further
deepened the gloom surrounding the UK economy.
By 1043 GMT the FTSE 100 <> had fallen 285.14 points to
3,802.69, after touching its lowest level since April 2003. The
index is down 22.5 percent this month, its biggest such fall
since the crash of 1987, and 41 percent this year.
The UK economy shrank by 0.5 percent in the third quarter of
2008, official data showed, more than expected and the first
fall in 16 years stoking fears of a painful and prolonged
recession.
This prompted UK and European markets to extend already
heavy losses and the pound to a slide below $1.55 <GBP=>to a
6-year low.
"The GDP data was significantly worse than expected, but
whether it justifies a fall of nearly 10 percent in the UK's
leading index, I'm not sure," said Rob Griffiths strategist at
Cazenove.
He said the falls had been exacerbated by funds being forced
to sell assets as lenders call in debts.
"Clearly the global picture is deteriorating but the extent
of the fall points to the move being driven by forced sellers."
Energy stocks took most points off the index as crude oil
<CLc1> fell below $64 a barrel, a 16-month low, as pessimism
about the global economy took the steam out of an OPEC agreement
to cut output by 1.5 million barrels a day.
BP <BP.L> was down 8.2 percent, Royal Dutch Shell <RDSa.L>
fell 8.6 percent, while Cairn Energy <CNE.L> lost 10.3 percent.
BG Group fell 9.4 percent. A spokeswoman for BG declined to
comment on reports that the company would bid for Queensland Gas
<QGC.AX>.
Miners were also among the biggest fallers as fears of a
sharp global slowdown knocked metal prices, with gold <XAU=>
falling more than 5 percent and copper <MCU3=LX> losing 6.3
percent.
Xstrata <XTA.L> fell 9.5 percent, Lonmin <LMI.L> lost 5.7
percent and Anglo American <AAL.L> shed 7.5 percent.
Banks fell across the board as fears on the state of the
crisis-hit financial sector persisted.
Barclays <BARC.L> slumped 14.6 percent, after UBS cut its
rating and earnings outlook, citing a more difficult outlook for
the UK economy.
HSBC <HSBA.L> and Standard Chartered <STAN.L> fell 12.1 and
12.4 percent, respectively, after Morgan Stanley cut price
targets on the banks and gave a negative outlook for emerging
market growth. []
London Stock Exchange <LSE.L> tumbled 12.5 with trading fee
reductions from rival Nasdaq OMX exacerbating concerns that the
LSE faces a growing competitive threat.
Other financial stocks were also badly hit, with insurers
among the heaviest losers. Prudential <PRU.L> was down 12
percent and Aviva <AV.L> down 11.5 percent.
Retailers were also hit as concerns mounted on the health of
the economy and as the John Lewis store chain reported a drop in
weekly sales. Marks & Spencer <MKS.L> fell 8.2 percent, while
Next <NXT.L> lost 4.7 percent.
(Reporting by Simon Falush, editing by Hans Peters)
