Weak commods, banks pull FTSE down 1 pct

Britain's top share index shed 1 percent by midday on Thursday, suffering a broad-based sell-off after disappointing earnings news from the U.S., with energy stocks the biggest laggards as crude fell.

By 1114 GMT, the FTSE 100 .FTSE was down 51.74 points to 5,206.11, having closed 0.3 percent higher on Wednesday.

Investors are looking now to start locking in some gains, said Jeremy Batstone-Carr, analyst at Charles Stanley.

The FTSE 100 has surged about 50 percent since touching a six-year trough in March, though is still 4 percent below its level in mid-September 2008 before the collapse of Lehman Brothers.

Banks were in the doldrums, following weakness on Wednesday in their U.S. peers after an influential bank analyst recommended selling Wells Fargo (WFC.N) shares.

Heavyweight HSBC (HSBA.L) shed 2.2 percent, with Barclays (BARC.L), Royal Bank of Scotland (RBS.L) and Standard Chartered (STAN.L) falling between 0.6 and 1.8 percent.

Lloyds Banking Group (LLOY.L), however, put on 0.5 percent on rumours it is close to securing backing for a cash call, with the Qatar Investment Authority, which last week sold down its holding in Barclays, said to be involved according to one trader.

Lloyds is planning to launch a rights issue and refinancing next week provided it can persuade regulators and the government to agree to a deal before the weekend, the Financial Times said on Wednesday.

The last time the bank sector had to raise money -- indeed the last time we went through a swathe of capital raisings -- investors took money out of the more liquid FTSE 100 stocks in order to take up rights at discounted prices, said Batstone-Carr.

U.S. futures pointed to a weaker start ahead of the next round of earnings from companies including American Express (AXP), Amazon.com (AMZN.O), AT&T (T.N), 3M Co. (MMM.N), McDonald's Corp. (MCD.N), Merck & Co. (MRK.N) and Xerox Corp (XRX.N).

Investors on Wednesday were disappointed by a wider-than-expected loss from Boeing (BA.N), and after online auctioneer EBAY (EBAY.O) forecast fourth-quarter results at the low end of expectations when posting in-line third-quarter numbers after hours.

MINERS, OILS UNDER PRESSURE

Energy stocks suffered as crude CLc1 slipped back towards $80 a barrel as a stronger dollar encouraged investors to take profits from a 12-month high hit on Wednesday.

BG Group (BG.L), BP (BP.L) and Royal Dutch Shell (RDSa.L) dropped 1.9 to 2.2 percent.

Disappointment that Chinese growth data, though robust, offered few surprises and a background of softer metals prices weighed on the mining sector.

Antofagasta (ANTO.L), Fresnillo (FRES.L), Kazakhmys (KAZ.L) and Randgold Resources (RRS.L) fell 2.3 to 3.2 percent.

Experian (EXPN.L) was among a handful of blue-chip gainers, up 0.8 percent, after Goldman Sachs upgraded its rating on the credit checking firm to buy and lifted its target.

On the second tier, pub groups notched up good gains, with Enterprise Inns (ETI.L), Punch Taverns (PUB.L) and Marstons (MARS.L) up 2.7 to 17.4 percent after the Office of Fair Trading gave the go-ahead for the industry to continue operating its beer tie arrangement.

British retail sales failed to grow for a second month running in September, official data showed on Thursday, confounding expectations for a 0.5 percent rise.

Shares in Next (NXT.L) and Marks & Spencer (MKS.L) fell 0.5 and 1.7 percent, respectively, while mid cap department store group Debenhams (DEB.L) lost 1 percent although it posted full-year profits towards the top end of expectations.