FTSE falls; oils eclipse gains in banks, Kingfisher

                                
 * FTSE 100 down 0.7 pct
                                
 * Lower oil prices weigh on energy stocks
                                
 * Kingfisher rises on B&Q, margin cheer
                                
 * Banks rise, Swiss bank Credit Suisse beats forecasts
                                
 
                                
 By Dominic Lau
                                
 LONDON, July 24 (Reuters) - Britain's top share index fell
by midday on Thursday as lower oil prices weighed on heavyweight
energy stocks, though a trading update boosted retailer
Kingfisher <KGF.L> and Credit Suisse <CSGN.VX> results lifted 
banks.
                                
 By 1043 GMT, the FTSE 100 <.FTSE> was down 36.2 points, or
0.7 percent, at 5,413.7, after rising 1.6 percent on Wednesday.
                                
 "It's good that the oil price, which is the big inflationary
issue, is receding a little bit. There are all sort of
geopolitical things that could flare at any point and send it
back to upward track," said Tim Whitehead, head of portfolio
services at Redmayne-Bentley.
                                
 "It's encouraging short-term. I wouldn't be surprised to see
some profit taking and I'll still be cautious on my outlook."
                                
 Oil shares were the biggest drag on the index as crude oil
<CLc1> traded below $125 a barrel, well off its peak of nearly
$148 earlier this month.
                                
 BP <BP.L> lost 0.8 percent, Royal Dutch Shell <RDSb.L> eased
0.9 percent, Cairn Energy <CNE.L> dropped 4.1 percent, and
Tullow Oil <TLW.L> shed nearly 6 percent.
                                
 Gas producer BG Group <BG.L> lost 4.6 percent although net
profit, excluding one-off items, beat forecasts in rising 97
percent to 807 million pounds in the second quarter thanks to
high gas prices.
                                
 "It may be too early, but there is an emerging view that oil
may have at last found a settling point," said Howard Wheeldon,
senior strategist at BGC Partners.
                                
 "If some form of stability is going to be achieved in the
oil price, then it is a good reason for the market to reflect a
more positive view."
                                
 Miners also eased, with Eurasian Natural Resources <ENRC.L>,
Rio Tinto <RIO.L>, Anglo American <AAL.L>, Xstrata <XTA.L>,
Vedanta Resources <VED.L>, Ferrexpo <FXPO.L>, Antofagasta
<ANTO.L> and Lonmin <LMI.L> down between 0.2 and 3.7 percent.
                                
 UK banks were firmer following their recent strong run after
Swiss bank Credit Suisse <CSGN.VX> beat forecasts with its
second-quarter net profit. [ID:nL23103192]
                                
 Royal Bank of Scotland <RBS.L>, Lloyds TSB <LLOY.L>, HBOS
<HBOS.L>, Standard Chartered <STAN.L>, Barclays <BARC.L> and
HSBC <HSBA.L> were up between 0.3 and 1.4 percent.
                                
 Morgan Stanley said in a note that it was scrapping its
"cautious" stance on banks and diversified financials sector and
moving to "neutral".
                                
 
                                
 KINGFISHER, LSE RISE
                                
 Kingfisher <KGF.L> surged more than 10 percent after
Europe's biggest home improvements retailer reported a 0.2
percent rise in second-quarter like-for-like sales at its B&Q
chain in the UK and improved gross margins in both its UK and
French businesses. [ID:nL24902127]
                                
 However, British retail sales slumped in June at the
sharpest monthly rate since the series began in 1986, more than
wiping out May's record rise and bringing three-month growth to
its slowest since late last year. [ID:nL4056396]
                                
 Within the retail sector, Marks & Spencer <MKS.L> slipped
2.4 percent and Sainsbury <SBRY.L> and Tesco <TSCO.L> both
dipped 1.1 percent.
                                
 U.S. home sales figures and weekly jobless claims later in
the day will provide further clarity on the health of economies.
                                
 Index heavyweight Vodafone <VOD.L> extended the previous
session's recovery, rising 1.1 percent. The mobile phone group
announced on Wednesday a surprise billion-pound share buyback
programme after its stock fell a day earlier on a
weaker-than-expected trading update.
                                
 London Stock Exchange <LSE.L> rose 6.6 percent after Morgan
Stanley upgraded the stock to "equal-weight" from "underweight".
                                
 Rolls-Royce <RR.L> advanced 2.2 percent after the engine
maker met forecasts with an 8 percent rise in first-half profit
and promised more growth and a 10 percent dividend hike.
                                
 Scottish & Southern Energy <SSE.L> shed 5.7 percent after it
said it expected adjusted pretax profit to show a modest rise in
the year to March 2009.
 (Additional reporting by Michael Taylor; editing by Rory
Channing)