Global recovery woes hit FTSE as UK data disappoints

* FTSE down 1.2 percent

* Miners, oils down on stalling economy

* Banks lag on Greek debt worries, regulation concerns

* UK retail sales data "shocking"- analyst

By David Brett

LONDON, June 16 (Reuters) - Gloomy economic data and lingering uncertainty over Europe's debt situation drove the FTSE 100 lower on Thursday, as investors retreated from riskier assets such as commodity stocks and banks.

The FTSE 100 <.FTSE> was down 70.50 points, or 1.2 percent, at 5,672.05, by 1059 GMT, adding to its 1 percent decline on Wednesday. The index is approaching levels last seen following the earthquake in Japan.

The retreat on London's blue chip index echoed losses overnight on the major indexes around the world, after data from the U.S. showed a troubling mix of higher prices and weak growth in the world's biggest economy.

The figures added to investors' worries over the potential for a hard landing in China as the world's fastest growing economy attempts to manage inflation and cool an overheating economy.

Miners <.FTNMX1770> were the worst performing sector, with commodities trader Glencore down 1.7 percent, knocked by cautious notes from Deutsche Bank and MF Global, which initiated coverage on Glencore with a "sell" rating.

ENRC , which has been the focus of bid speculation involving Glencore as it suffers boardroom leadership battles, fell 3 percent as Daily Telegraph reported Johannes Sittard, the chairman of the Kazakh miner had agreed to stand down from the board following a corporate governance review.

Kazakhmys , a shareholder in ENRC, was down 3.4 percent.

Data from Britain did little to boost investor confidence as retail sales fell more than twice as fast as expected in May. .

"It's a shocking fall," Hetal Mehta, UK economist at Daiwa Capital Markets, said.

"Given the continued pressures consumers face from falling real wages and high unemployment, we do not see much improvement in the situation for households in the near term."

Retailers such as Sainsbury and Kingfisher shed 1.5 percent.

GREEK CONCERN

Greece's ongoing debt troubles were at the forefront of investors' minds on mounting concern that officials could delay, or even fail to agree on, a new bailout package for Greece. [ID:nLDE75F0EA]

The cost of insuring Greek debt against default set fresh record highs on Thursday.

"There's an awful lot of risk associated to development on the Greek situation but, beneath it all, you've got a market back down to levels where there is, we think, some compelling value, and we'd like to think that it will bounce back through this," Paul Kavanagh, a partner at Killik & Co, said.

Global debt fatigue weighed on Britain's banking sector <.FTNMX8350>, with Barclays down 2.2 percent as its investors day failed to inspire upgrades from brokers.

The sector was also in the doldrums after British Finance minister George Osborne backed the UK Independent Commission on Banking's proposal to ring-fence retail banks from investment banks and set higher capital ratios, with investors uncertain as to how the changes will benefit shareholders. [ID:nLDE74P0V1]

Elsewhere, blue-chip car and aerospace parts GKN shed 4.6 percent after FTSE 250 <.FTMC> peer Umeco posted results, which Investec said was below its forecasts.

On the second tier, electronics group Laird shot up 39 percent after rejecting a bid from U.S. firm Cooper Industries as investors anticipated a higher offer.

U.S. stock index futures pointed to a lower open on Wall Street on Thursday ahead of U.S. housing starts and permits data, weekly jobless claims, and the Philadelphia Federal Reserve Bank's business activity survey.

(Additional reporting by Tricia Wright, Editing by Sophie Walker)