By Ana Nicolaci da Costa
LONDON, Feb 11 (Reuters) - Britain's top share index eased
on Monday, as downbeat brokerage notes and a grim outlook from
the Group of Seven finance leaders over the weekend prompted
investors to take profits on banks, and some miners also fell.
At 1204 GMT, the FTSE 100 index <> was 0.6 percent
lower at 5,751.0 points, as data showed British factory gate
inflation rose more than expected in January. The index gained
more than 1 percent on Friday.
Banks were the worst performers on the index. The Group of
Seven finance leaders meeting in Tokyo over the weekend issued a
warning over the impact of the credit market turmoil on the
global economy but did not unveil joint plans to boost growth.
Adding to the pressure, HSBC cut its price targets on
Barclays <BARC.L>, Lloyds TSB <LLOY.L>, HBOS <HBOS.L> and
British buy-to-let mortgage bank Bradford & Bingley <BB.L>, and
their shares fell more than 1 percent.
Alliance & Leicester <ALLL.L>, also grappling with a price
target cut, was down 4.6 percent.
"We seem to be trapped in this credit crisis. We thought
that we had passed over the worst, and yet the daily information
is more and more losses are coming to light," said Edward
Menashy an economist at Charles Stanley.
"The UK is not going to be satisfied until the domestic
commercial banks come up with their finance figures at the end
of this month. We hope they are going to be straightforward and
absolutely clean with the extent of the losses they've
incurred."
Bradford & Bingley, Nordea <NDA.ST>, KBC <KBC.BR> and UBS
<UBSN.VX> are among European banks reporting this week.
Other interest-rate sensitive sectors including homebuilders
also fell after Goldman Sachs revised its outlook on the sector.
Persimmon <PSN.L> dropped 2.8 percent after a downgrade from
Goldman Sachs, while Taylor Wimpey <TW.L> and Barratt
Developments <BDEV.L> shed 3.7 percent after Goldman added them
to its conviction sell list.
Miners were the second biggest weight on the index, after
the world's largest platinum producer Anglo Platinum <AMSJ.J>
posted weaker full-year headline earnings per share.
Angloplat, a majority of which is owned by Anglo American
<AAL.L>, also posted a lower output versus a year ago and
forecast even lower production for 2008.
Anglo American was down 1.7 percent, Rio Tinto <RIO.L> and
BHP Billiton <BLT.L> fell as much as 2 percent and Xstrata
<XTA.L> shed 1.3 percent.
But Kazakhmys <KAZ.L> gained 2.7 percent along with a rise
in the price of copper <MCU3=LX> and Lonmin <LMI.L> rallied 1.5
percent as platinum <XPT=> hit a record high.
Smiths Group <SMIN.L> fell 2 percent after the engineer said
overall profit and sales in the first half of its financial year
would meet expectations, but strength in its detection and
speciality engineering businesses offset a flat performance in
medical.
ECONOMIC WOES
In a sign that investors remain worried about the prospects
for the world economy, European credit spread indexes stuck near
record highs reached on Friday. The G7 pledged action for
restoring markets to financial health but stayed clear of any
joint plans.
Data on Monday showed British factory gate inflation rose to
its highest rate in more than 16 years, making it more difficult
for the Bank of England to cut interest rates as fast as some
market participants would hope.
The BoE cut rates last week by a quarter of a percentage
point but policymakers remained worried about inflation.
Heavyweight oil stocks cushioned losses, as oil prices held
above $91 a barrel. BP <BP.L> rose 0.4 percent and Royal Dutch
Shell <RDSa.L> gained 1 percent.
GlaxoSmithKline <GSK.L> rose 2.4 percent making it among the
biggest percentage gainers after UBS upgraded the stock to "buy"
from "neutral".
(Additional reporting by Michael Taylor and Dominic Lau;
editing by Sue Thomas)
