* FTSE slips 0.7 percent, snaps winning run
* Banks weak, Irish stress test results after close
* Retailers suffer after downbeat update from Mothercare
* Randgold up after update
By Simon Falush
LONDON, March 31 (Reuters) - British bank shares fell on
further concerns about the state of finances in the peripheral
euro zone countries, dragging the country's top shares lower by
the close on Thursday and ending a six-day winning run.
Ireland said its four remaining banks require another 24
billion euros ($34.1 billion) to enable them to withstand
potential losses from a worsening of the economy.
[]
The blue chip index <> closed down 39.54 points, or 0.7
percent, at 5,908.76 by 1050 GMT, having risen 0.3 percent on
Wednesday.
After a week of low volumes, trading was robust at 126
percent of the average of the last 90 trading days.
The Irish announcement came as markets closed, but the index
fell sharply at the closing auction where traders settle
outstanding trades for the day.
"We saw equity markets suddenly slide very rapidly towards
the close with the banking sector slipping back quite
considerably," said Michael Hewson, market analyst at CMC
Markets.
"What we have seen in the closing auction (in the FTSE 100)
is an early indication of what the market thinks of it."
Fears about the state of finances in some poorer euro zone
countries had already been heightened when it was revealed that
Portugal's deficit was more than a percentage point above target
at 8.6 percent of GDP.
Europe's largest banks HSBC <HSBA.L> fell 2.3 percent while
Barclays <BARC.L> fell 2.3 percent and insurer Prudential
<PRU.L> fell 2.1 percent.
Firmer commodity prices lifted some miners and energy firms,
preventing heavier losses.
West African-focused gold miner Randgold Resources <RRS.L>
was the top gainer, up 8.8 percent after it said it is sticking
with the production forecast for 2011 which it gave early last
month, even though the unrest in the Ivory Coast, home to its
newest mine, has since worsened.
Shares in Vedanta Resources <VED.L> added 2.8 percent after
a press report raises hopes of a green light for its planned buy
of a stake in Cairn Energy's <CNE.L> Cairn India unit <CAIL.BO>.
Chip designer ARM Holdings <ARM.L> climbed 2.2 percent
percent, boosted by a Bank of America Merrill Lynch upgrade.
RETAILERS REVERSE
Retailers continued a poor run, with a profit warning from
mid-cap Mothercare <MTC.L> further shredding sentiment on the
sector. Kingfisher <KGF.L> slipped 3.3 percent.
ITV, whose biggest source of revenue is advertising from
retailers was the top faller, down 3.9 percent.
"The domestic situation is difficult and the
consumer-oriented part of the market will be a feature weighing
on the market," said Tim Rees, manager of the 270 million pound
($434.6 million) Insight equity income fund.
However, he added that the internationally focused index is
supported by its exposure to commodity stocks which should
continue to benefit from robust global demand.
Vodafone <VOD.L>, the world's largest mobile operator by
revenue, shed 1.9 percent after it said it would pay $5 billion
to buy out Essar Group from its Indian joint venture.
[]
International Power <IPR.L> slipped 2.3 percent after
JPMorgan expressed concerns over potential downgrades in the
consensus market forecast for earnings and limited newsflow.
Technical indicators were seen as constraining potential
future strength in the market.
"On a more long term scale the 5,975 level remains the area
capping any gains on the upside, and has done since early in
March," James Hughes, senior market analyst, at Alpari UK, said.
(Editing by Greg Mahlich)
