* FTSE 100 index drops 1.6 percent
* Banks knocked by European debt contagion concerns
* Miners weak as metal prices fall
* Kingfisher hit by double broker downgrades
By Jon Hopkins
LONDON, Nov 26 (Reuters) - Britain's leading shares were
down sharply by midday on Friday, reversing recent gains, with
banks knocked by ongoing concerns over Europe's debt crisis, and
commodity issues hit by weak metals and crude prices.
By 1157 GMT, the FTSE 100 index was 92.89 points lower, or
down 1.6 percent at 5,606.04, erasing most of a 117 point rally
made in the past two sessions.
The UK blue chip index is now down 2.2 percent on the week
and is 1.2 percent lower on the month, having seen strong gains
in the first-half of November eradicated.
"From a chartist point of view, (on) the FTSE 100 the
downside breakout of the 20-day moving average has dampened the
bullish sentiment and tarnished the short term outlook," said
Nicholas Suiffet, an analyst at Trading Central.
"As long as the former highs reached in early November are
not surpassed, the risk will remain on the downside. Expect a
further correction move towards the support base around 5,440
and 5,330," Suffiet said.
Banks were the worst blue chip performers on Friday, led by
Lloyds Banking Group <LLOY.L>, down 4.2 percent, as worries
about European sovereign debt contagion gathered pace.
A majority of euro zone nations and the European Central
Bank are encouraging Portugal to seek aid from a European rescue
fund, the Financial Times Deutschland reported. []
Integrated oils were also a drag on blue-chip sentiment as
the crude price <CLc1> fell, hurt by a stronger dollar, with BP
<BP.L> and Royal Dutch Shell <RDSa.L> both down 1.5 percent.
Miners also suffered as metal prices fell reversing a
recent rally on concerns about tightening trading conditions and
with China interest rate concerns continuing.
Vedanta Resources <VED.L> was the top FTSE 100 faller, down
4.9 percent, while Antofagasta <ANTO.L> lost 4.7 percent.
China will shift its monetary policy to "stable" from
"relatively loose" next year while conducting an active fiscal
policy to maintain economic growth of at least 8 percent in
2011, the official Shanghai Securities News reported on Friday,
citing unidentified sources. []
WALL STREET TO WILT
U.S. stock futures <DJc1> <SPc1> <NDc1> pointed to a weaker
start on Wall Street as trading resumes after the Thanksgiving
holiday on Thursday, with the market only open for a half-day
session on Friday.
Among individual UK blue-chip fallers, DIY retailer
Kingfisher <KGF.L> shed 2.9 percent. Traders cited the impact of
a downgrade by BofA Merrill Lynch to "underperform" from
"neutral" with an unchanged 230 pence price target.
Investec Securities also cut its stance on Kingfisher to
"sell" from "hold" in a review of British general retailers in
which it downgraded the sector overall to "underweight".
However, Marks & Spencer <MKS.L> added 0.2 percent as
Investec raised its rating to "buy" from "hold" in the review.
Telecoms giant BT Group <BT.L> was the top FTSE 100 riser,
up 3.1 percent after the firm said it is to sell a 5.5 percent
stake in Indian IT services group Tech Mahindra <TEML.BO>.
BT also got a boost as Exane BNP Paribas hiked its target
price for the firm by 20 percent to 265 pence.
(Editing by Jon Loades-Carter)
