* Pharmas rally on Obama setback and waning risk appetite
* Miners fall as China tightening fears persist
* Banks weak ahead of Goldman Sachs results
By David Brett
LONDON, Jan 21 (Reuters) - Britain's top share index was up
0.2 percent by midday on Thursday as strength in drugmakers
offset weak miners, on an uncertain demand outlook in China,
with banks down ahead of Goldman Sachs' fourth-quarter results.
By 1156 GMT, the FTSE 100 <> index was 0.20 points
lower at 5,431.00, having posted its biggest one-day fall in a
month on Wednesday on the back of speculation of fiscal
tightening in China and downbeat U.S. banking results.
Miners fell back as metal prices retreated amid fears that
China could tighten fiscal policy after data released overnight
showed China's economy expanded by 10.7 percent between October
and December, compared with a year earlier, up sharply from 9.1
percent in the third quarter. []
Rio Tinto <RIO.L>, Xstrata <XTA.L>, BHP Billiton <BLT.L>,
Anglo American <AAL.L> and Kazakhmys <KAZ.L> were among the
biggest fallers, down 1.2 to 3.6 percent.
"The market has taken countenance of news that came out last
night and translated that to what is happening over here... be
it that could be a correction, which most commentators agree has
been coming for a while and which is not necesarily a bad
thing," said Howard Wheeldon, strategist at BGC Partners.
Wheeldon added that investors used an early morning spike in
prices to wind down or get out of positions in anticipation of
what might happen once New York opens this afternoon.
Banks remained depressed ahead of more fourth-quarter
earnings figures from the U.S., this time from Goldman Sachs
<GS.N>.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Lloyds
Banking Group and Standard Chartered <STAN.L> were down 1.9 to
3.7 percent.
Worries have built up over the state of the industry
following a glut of disappointing updates from U.S. banks in the
past week.
Among individual fallers, supermarkets group Wm Morrison
<MRW.L> shed 1.4 percent as cautious comments about 2010 and the
lack of news on a new chief executive outweighed the biggest
rise in Christmas sales among Britain's top four grocers.
[]
PHARMA SUPPORT
Shares in pharmaceutical stocks continued to gain traction
on hopes U.S. president Barack Obama's healthcare plan will
stall and as investor risk appetite waned. []
AstraZeneca <AZN.L> climbed 2.1 percent as Morgan Stanley
upgraded its rating to "overweight" from "equal weight".
The broker also raised its target price for GlaxoSmithKline
<GSK.L> to 1,530 pence from 1,320 pence. Glaxo gained 2 percent,
while Shire <SHP.L> was up 1 percent.
The sector led a raft of defensively-perceived issues
higher. United Utilities <UU.L> was the top FTSE 100 performer,
up 4.5 percent as investors cheered its decision to cut its
dividend in order to protect its balance sheet from restrictions
placed on its returns by the regulator. []
Severn Trent <SVT.L> was also higher, adding 2.1 percent.
The group announced its decision to rebase its dividend on
Wednesday.
Centrica <CNA.L> and National Grid <NG.L> rose 0.7 and 4.5
percent respectively, seeing support as HSBC raised target
prices for both companies in a review of European utilities.
Energy stocks gained amid a stabilisation in the crude price
<CLc1>, which hovered around $78 a barrel with BG Group <BG.L>,
Royal Dutch Shell <RDSa.L> and BP <BP.L> gaining 0.5 to 0.8
percent.
Oil explorer Tullow Oil <TLW.L> added 0.8 percent after it
said a well it drilled offshore Ghana had struck oil, proving
the existence of a major new field and adding to a string of
finds in the west African country in the past three years.
[]
British Airways <BAY.L> was again a good performer, having
been one of the few stocks to advance on Wednesday following
confirmation by cabin staff they would not strike over Easter
and with hopes its planned merger with Iberia will proceed soon.
The airline was up 2.6 percent, also supported by results
from easyJet <EZJ.L>, which was 4.5 percent higher.
(Editing by Hans Peters)
