* FTSE 100 falls 0.8 pct, heads for 8th straight weekly loss
* Banks slip on concerns about more writedowns
* Oils, miners gain on firm commodity prices
By Atul Prakash
LONDON, July 11 (Reuters) - Britain's top share index fell
by midday on Friday and headed for an eighth straight weekly
loss as banking stocks slipped on concerns of further capital
raising while a jump in crude oil prices stoked inflation fears.
By 1102 GMT the FTSE 100 <> was down 44 points, or 0.8
percent, at 5,362.8, extending the 2.2 percent fall in the
previous session. It has dropped about 17 percent this year
after annual average gains of 10 percent in the last five years.
Shares in Vodafone <VOD.L> fell 2.6 percent after tax
experts and a source familiar with the situation confirmed that
the mobile phone group's potential tax bill in India could
double to $4 billion if it lost a court case.
An Indian court last week concluded hearings in a $2 billion
tax case relating to Vodafone's purchase of a controlling stake
in an Indian mobile operator last year.
Banks changed course to decline, after rising earlier in the
session on slightly improved sentiment following Federal Reserve
Chairman Ben Bernanke's comments on Thursday that the Fed and
the government were focused on stabilising the financial system.
A report in the New York Times said the U.S. government was
considering a plan to take over the country's two largest
mortgage lenders -- Freddie Mac <FRE.N> and Fannie Mae <FNM.N>
-- if their problems worsen.
But positive sentiment soon evaporated and concerns about
more writedowns in the banking sector and the need to raise more
capital resurfaced.
"Further concerns in the U.S. over the future of Fannie Mae
and Freddie Mac, combined with the recent rally in oil led by
supply concerns in Brazil, are pulling the FTSE 100 dangerously
close to bear market levels," said Andrew Turnbull, director at
Blue Index CFDs.
"Our stance shall remain negative on most equities with the
exception of pharmaceuticals and oils," he added.
Barclays <BARC.L> fell 2 percent, HBOS <HBOS.L> declined 0.5
percent and Standard Chartered <STAN.L> shed 1.7 percent. Royal
Bank of Scotland <RBS.L> fell 2.2 percent after Zurich Financial
pulled out of the auction for the bank's insurance business.
OILS, MINERS GAIN
The oils sector topped the FTSE 100 gainers list on higher
crude prices that rose over $2 to around $144 a barrel, closing
in on record highs, on growing worries of threats to supplies
from Iran and Nigeria and fears of disruptions in Brazil.
"Oil has bounced and that's a huge weighting. People were
saying last week we had reached the top of oil prices, which is
not the case," said Nick Batsford, technical analyst at Dawnay
Day Capital Markets.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas producer BG Group
<BG.L>, Cairn Energy <CNE.L> and Tullow Oil <TLW.L> added
between 1.1 and 3.5 percent.
Stronger metals prices provided a lift to mining stocks,
with Eurasian Natural Resources <ENRC.L> rising 6 percent,
Antofagasta <ANTO.L> gaining 0.4 percent and Anglo American
<AAL.L> adding 0.2 percent.
(Additional reporting by Michael Taylor and Kate Holton;
Editing by Erica Billingham)
