* FTSE retreats from 56-week closing high
* Banks dip as Citigroup, Goldman results disappoint
* J Sainsbury jumps on bid talk
By Simon Falush
LONDON, Oct 15 (Reuters) - Britain's top share index closed
lower on Thursday as banks fell after U.S. banking earnings
failed to meet some expectations, while miners tracked metal
prices down.
Bucking the trend, J Sainsbury <SBRY.L> was the day's
biggest gainer on talk of a bid from Qatar.
The FTSE 100 <> ended down 0.6 percent, or 33.15 points
at 5,222.95, retreating from a 56-week closing high set on
Wednesday.
Although third-quarter earnings from Goldman Sachs <GS.N>
and Citigroup <C.N> came in better than analysts' forecasts,
they were disappointing relative to the much stronger than
expected results from JPMorgan <JPM.N> on Wednesday.
Barclays <BARC.L>, HSBC <HSBA.L>, Standard Chartered
<STAN.L>, Royal Bank of Scotland <RBS.L> and Lloyds Banking
Group <LLOY.L> fell 0.4-2.1 percent.
"We're being firmly dictated by the earnings season," said
Joshua Raymond, market strategist at City Index.
"The spectacular results from JP Morgan may well be having a
derogatory effect as the Goldman Sachs and Citi results didn't
live up to them."
Miners fell with profit takers moving in as metal prices
retreated. Rio Tinto <RIO.L>, Lonmin <LMI.L>, Anglo American
<AAL.L> and Fresnillo <FRES.L> fell 0.7-4.1 percent.
Anglo American <AAL.L> was the biggest faller, down 4.1
percent, after rival Xstrata <XTA.L> said it would not make a
formal takeover offer.
Energy stocks were lower as investors banked profits, though
oil prices continued to climb <CLc1>. BG Group <BG.L>, Royal
Dutch Shell <RDSa.L>, BP <BP.L> and Cairn Energy <CNE.L> shed
0.6-2.4 percent.
Tullow Oil <TLW.L>, which said in a drilling update the
Mahogany-4 well off Ghana had found oil, dropped 2.3 percent.
The FTSE 100 has surged 51 percent from a six-year trough in
March, but is still 3.6 percent below its level in mid-September
2008 before the collapse of Lehman Brothers.
Sterling racked up its biggest one-day gain against a basket
of currencies <=GBP> in nearly a year after Monetary Policy
Committee member Paul Fisher told the Financial Times the Bank
of England's interest rate cuts and injection of money into the
economy were working. []
SAINSBURY SURGES
Food retailer J Sainsbury <SBRY.L> topped the FTSE
leaderboard, up 10.1 percent with traders citing talk of a bid
from Qatar, though Sainsbury and the Qatar Investment Authority
declined to comment. []
Trading in Sainsbury shares was frenetic with volumes more
than nine times the average of the last 90 trading days.
The news helped peers Tesco <TSCO.L> and Wm Morrison <MRW.L>
rise 1.7 and 1.8 percent respectively.
Life Insurers were also in demand after Nomura issued a
bullish note on the sector.
Aviva <AV.L>, Prudential <PRU.L> and Legal & General
<LGEN.L>, which were the broker's top European picks, rose
0.6-1.1 percent, while Friends Provident <FP.L> and Standard
Life <SL.L> climbed 1.3 and 0.8 percent respectively.
Burberry <BRBY.L> touched a 22-month high, rising 2 percent
and extending the previous session's gains, as JPMorgan raised
its target price on the luxury goods group and lifted its
full-year forecasts after a first-half trading update on
Wednesday.
(Reporting by Simon Falush, editing by Nigel Stephenson)
