*FTSE 100 falls 2.4 pct
*UK house prices fall further: banks, housebuilders down
*Miners and oil shares weigh
By Dominic Lau
LONDON, July 1 (Reuters) - Britain's top share index tumbled
2.4 percent by midday on Tuesday, with banks suffering after
data showed UK house prices fell again in June and on concerns
of more losses in the sector.
By 1022 GMT, the FTSE 100 <> was down 133.2 points at
5,492.7, giving up a 1.7-percent gain on Monday, and continuing
to trade at levels last seen in mid-March.
The UK benchmark index lost nearly 13 percent from January
to June after five consecutive years of gains. The market gained
6.2 percent in January to June 2007.
"We are in a bear market and quite frankly anything that can
be trashed, they are trashing it, good or bad it doesn't matter.
They are just selling everything today," a trader said.
Oil shares also weighed heavily on the index following
recent gains, despite crude prices <CLc1> trading near a record
high above $143 a barrel.
BP <BP.L> lost 1.2 percent, Royal Dutch Shell <RDSa.L>
dropped 1.4 percent, gas producer BG Group <BG.L> slipped 2.1
percent and Tullow Oil <TLW.L> shed 3.1 percent.
In the mining sector, Anglo American <AAL.L>, BHP Billiton
<BLT.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L>, Vedanta Resources
<VED.L>, Lonmin <LMI.L> and Eurasian Natural Resources <ENRC.L>
fell between 1.9 and 4.7 percent.
Banks, however, were the biggest weighted losers on the
index after a survey showed British house prices fell for the
eight straight month in June to stand more than 7 percent below
the peak hit last year, which is likely to fan fears the market
is on the verge of a crash. []
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, HBOS
<HBOS.L>, HSBC <HSBA.L>, Lloyds TSB <LLOY.L> and Standard
Chartered <STAN.L> were down 2.5 to 5.2 percent.
Shares in Swiss bank UBS <UBSN.VX> fell to a 10-year low
amid speculation it will announce more writedowns for the second
quarter, potentially of around $5 billion, while Germany's
Deutsche Bank <DBKGn.DE> sagged on worries of more writedowns
and the threat that revenue will remain under pressure for many
months due to the credit crunch, dealers said.
Overnight, Lehman Brothers <LEH.N> fell nearly 11 percent on
rumours that the U.S. investment bank would be bought for $15 a
share, a price well below market levels, as well as rumours of
discouraging remarks from the bank's chief executive.
[]
"It's a pretty nervous start to the second half of 2008.
Worries over bank writedowns just won't go away," said Keith
Bowman, an analyst at Hargreaves Lansdown.
The property price data also weighed on housebuilders, with
Taylor Wimpey <TW.L>, Persimmon <PSN.L>, Redrow <RDW.L>, Bovis
Homes <BVS.L> and Bellway <BWY.L> all taking a whipping.
Building materials distributor Wolseley <WOS.L> fell 6.6
percent, also weighed by a price target cut from Goldman Sachs,
while Europe's biggest home improvements retailer Kingfisher
<KGF.L> lost 5.8 percent.
Barratt Developments <BDEV.L>, however, advanced 1.7 percent
after the Daily Telegraph said it was close to securing a rescue
refinancing with lenders that will relax its banking covenants
and help it cope with the housing market downturn.
Britain's manufacturing sector contracted last month at its
sharpest rate since December 2001 as output and new orders fell
at their fastest rate in almost a decade, according to a survey.
[].
BT Group <BT.L>, Reckitt Benckiser <RB.L> and British Energy
<BGY.L> were the only gainers on the FTSE 100.
(Additional reporting by Michael Taylor and Atul Prakash;
Editing by Erica Billingham)
