* FTSE 100 down 0.7 pct
* UK banks retreat, traders worry about European peers
* U.S. May non-farm payrolls due at 1230 GMT
* BP top gainer on oil spill update
By David Brett
LONDON, June 4 (Reuters) - Britain's top shares reversed
early gains by midday on Friday, as euro zone debt concerns
resurfaced with the focus on French bank Societe Generale
<SOGN.PA> and Hungary's economy.
At 1143 GMT, the FTSE 100 <> was down 34.35 points, or
0.7 percent, at 5,176.83, off the session peak of 5,261.71,
after ending 1.2 percent higher to hit a two-week closing high
on Thursday.
UK banks reversed early gains with traders concerned over
French peer Societe Generale's derivatives operations.
A Societe Generale spokeswoman said the bank had nothing to
say on the market talk. Several traders said the speculation
might be spurious.
Barclays <BARC.L>, HSBC <HSBA.L>, Standard Chartered
<STAN.L>, Royal Bank of Scotland <RBS.L> and Lloyds Banking
Group <LLOY.L> shed 0.7 to 3.8 percent.
Investors' anxiety increased after a spokesman for the
Hungarian Prime Minister Viktor Orban told TV2 television the
Hungarian budget was in a "much worse" state than what the
previous government put in the budget law, and "skeletons were
continuously falling out of the closet".
The spokesman also said the government will produce an
economic action plan within 72 hours after releasing its report
on the budget, which is expected this weekend or early next
week.
"The news from the euro zone has sapped momentum out of the
market and reminded investors that not all is well with the
global recovery," Jimmy Yates, head of equities at CMC Markets
said.
BP GAINS
BP <BP.L> gained for a second day running, rising 4.5
percent, after it said it aims for the containment cap placed
over the gushing well pipe in the Gulf of Mexico to stop at
least 90 percent of the flow of oil spilling into the ocean.
[]
Investors were also watching out for expected strong U.S.
jobs data later in the session.
May U.S. non-farm payrolls, due at 1230 GMT, are forecast to
have risen by 513,000, after a 290,000 increase in April, with
the unemployment rate seen at 9.8 percent, down from 9.9 percent
in April.
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Graphic showing change in U.S. non-farm payrolls
http://r.reuters.com/dyr28k
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(Graphic by Scott Barber; Editing by Erica Billingham)
