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REFILE-FTSE falls 1.1 pct as results, data dent demand

Published 10/22/2009, 06:11 AM
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(Corrects day in first paragraph to Thursday)

* Miners, oils retreat as commodities dip * Banks fall tracking weak U.S. peers overnight

* Pubs boosted by OFT 'beer tie' decision

By Simon Falush

LONDON, Oct 22 (Reuters) - Britain's top share index fell 1.1 percent on Thursday, weighed down by weakness in banks and commodity stocks as disappointing corporate results and Chinese data crimped demand for riskier assets like equities.

By 0800 GMT the FTSE 100 was 55.18 points lower at 5,202.67 after it closed 14.45 points, or 0.3 percent higher on Wednesday.

U.S. stocks ended lower Wednesday knocked by a late sell-off in financial issues, after an influential banks analyst recommended selling Wells Fargo shares, and as a wider-than-expected loss from Boeing disappointed investors.

Banks weighed heavily on the UK blue chips index following weakness in their U.S. peers.Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group fell 1.1 to 2.6 percent.

After-hours U.S. earnings news also disappointed, with online auctioneer EBAY forecasting fourth-quarter results at the low end of expectations while posting in-line third-quarter numbers.

"We've seen more negative data and results and there's a worry that the more positive data previously was a flash in the pan," said Philip Gillett, sales trader at IG Index. "Investors are starting to worry if the rises are sustainable."

The FTSE 100 has gained 50 percent since touching a six-year trough in March, having received a further boost earlier in the month from strong results from the likes of JPMorgan

Asian shares fell on Thursday impacted by disappointment that Chinese growth data, though robust, offered few surprises.

MINERS SLIP

The Chinese news and a slightly more downbeat demand outlook hit metal prices which knocked miners.

Rio Tinto, Xstrata, Lonmin,, Kazakhmys and Fresnillo fell 1.7 to 4 percent.

Anglo American outperformed slightly, falling 1.2 percent after it announced a restructuring that will shed a quarter of overhead staff and save $120 million.

Energy stocks were also weaker as crude fell slightly, though it remained above $80 per barrel.

BG Group, BP, Royal Dutch Shell and Cairn Energy fell 0.8 to 1.2 percent.

Investor attention will be on September British retail sales numbers when they are released at 0830 GMT, with a 0.5 percent rise expected on the month, after a flat reading in August, giving a year-on-year increase of 2.8 percent, up from 2.1 percent in the previous month.

Indicating an improving outlook on the high street, midcap department store group Debenhams announced full-year profits towards the top end of expectations.

But this failed to lift the stock, which fell 1.3 percent while Next and Marks & Spencer fell 0.7 and 1.1 percent, respectively.

Experian was the strongest among a handful of blue chip gainers, up 1.5 percent after Goldman Sachs upgraded the credit checking firm to "buy" from "neutral" and lifted its target.

Among mid caps, pub groups were the runaway gainers with Eneterprise Inns Punch Taverns and Marstons up 3.9 to 18.4 percent after the Office of Fair Trading gave the go-ahead for the industry to continue operating its "beer tie" arrangement. (Reporting by Simon Falush; Editing by Hans Peters)

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