* FTSE 100 down 0.3 percent
* Energy weak; Royal Dutch Shell Q3 results disappoint
* Banks rally; Lloyds up on capital-raising hopes
* National Express slumps as merger plans dropped
By Simon Falush
LONDON, Oct 29 (Reuters) - Weakness in energy stocks, pulled
lower by downbeat results from Royal Dutch Shell <RDSa.L>,
offset gains from banks and miners leaving Britain's FTSE 100
<> off 0.3 percent by midsession on Thursday.
Investors were cautious ahead of U.S. GDP data, which will
be closely eyed for clues on the timing and pace of a recovery
in the global economy.
At 1139 GMT, the FTSE 100 <> index was 13.26 points
lower at 5,067.16, having closed down 120.55 points, or 2.3
percent, at 5,080.42 on Wednesday, its biggest one-day
percentage fall since July 2.
"There's been a bit of a pullback as there's been a pause in
positive corporate and economic newsflow," said Graham Secker,
UK equity strategist at Morgan Stanley.
"But that's not necessarily a bad thing, as it means that
authorities won't be too hasty in retreating from their stimulus
policies."
Oil giant Royal Dutch Shell <RDSa.L> was the biggest blue
chip faller, down 4.4 percent after it said third-quarter net
profits fell 73 percent, hit by falling oil and gas prices and
refining margins, and Chief Executive Peter Voser warned of a
slow recovery. []
Shell's numbers ended a mixed batch of third-quarter results
for the energy majors, with BP <BP.L> beating forecasts on
Tuesday but BG Group <BG.L> missing output forecasts on
Wednesday.
BG Group shares shed 2.2 percent, while BP fell 0.2 percent,
and oil explorer Cairn Energy <CNE.L> lost 0.6 percent with its
latest interim management statement failing to excite.
U.S. third-quarter GDP numbers, due at 1230 GMT, will give
investors a further idea as to the durability of the perceived
recovery after a shock fall in UK Q3 GDP on Friday.
According to a Reuters poll of 77 economists, the U.S.
economy is expected to have grown 3.3 percent at an annualised
rate in the third quarter, after shrinking 0.7 percent in the
second.
BANKS BOUNCE BACK
Banks were the biggest blue chip gainers, bouncing back
after sharp falls earlier this week on concerns over possible
break-up calls from the European Commission following a move by
Dutch peer ING <ING.AS> to split in two.
Lloyds Banking Group <LLOY.L> gained 8.6 percent as it
confirmed it is considering raising capital via a rights issue
and debt swap as an alternative to a costly government scheme to
insure it against credit losses. []
The bank, 43 percent state-owned after receiving a 17
billion pound ($27.95 billion) bailout last year, said it was in
"advanced discussions" with the British government and
regulators over its potential capital raising.
Part-nationalised peer Royal Bank of Scotland <RBS.L>, also
thought to be looking at plans to reduce its exposure to the
government's asset protection scheme, was the top FTSE 100
riser, up 11 percent, while Barclays <BARC.L> gained 3.3 percent
and HSBC <HSBA.L> added 0.5 percent.
Asia-focused bank Standard Chartered <STAN.L> added 0.8
percent after it said it said it was benefiting from growth
across its franchises but cautioned the economic outlook remains
fragile. []
Miners were also stronger as metal prices held steady. Rio
Tinto <RIO.L>, Xstrata <XTA.L>, Lonmin <LMI.L> and Anglo
American <AAL.L> added 0.3-3.3 percent.
Drugmaker AstraZeneca <AZN.L> gained 0.8 percent after it
reported Q3 earnings per share and sales well above market
expectations. []
Other pharmaceuticals were weaker, however. GlaxoSmithKline
<GSK.L> which reported slightly disappointing figures on
Wednesday shed 1.1 percent, and Shire <SHP.L>, which reports on
Friday, fell 0.1 percent.
Among the mid caps, National Express <NEX.L> was the biggest
faller, down 9.6 percent, after bus and rail peer Stagecoach
<SGC.L> said National Express has decided not to pursue
proposals for a merger. []
Stagecoach shares gained 2.4 percent.
U.S. jobless claims for the week ending Oct. 24 will come
under scrutiny later in the session.
(Additional reporting by Jon Hopkins; Editing by Jon
Loades-Carter)
