* FTSE falls 0.95 pct, down 16 pct this year
* Miners slip, tracking weaker metals prices
* Banks under pressure after Goldman note, outlook
By Atul Prakash
LONDON, July 4 (Reuters) - Britain's blue-chip index fell
nearly 1 percent by midday on Friday with banking stocks hit by
a bearish Goldman Sachs note and miners tracking softer metals
prices.
By 1109 GMT, the commodity-heavy FTSE 100 <> was down
52 points, or 0.95 percent, at 5,425.1 points, giving up the
previous session's gains.
The index, which has fallen nearly 16 percent this year
after five successive years of gains, is heading for its seventh
weekly loss in a row.
"If you look at the technicals and the fundamentals, people
think there is still some way for it to fall, probably another
250 points before we get any recovery," said Neil Parker, market
strategist at Royal Bank of Scotland.
"Nobody wants to be long in this market ... I would be
particularly worried by a lot of inflation numbers that are
coming out," he added.
Goldman said in a note to clients that European banks might
need to raise 60 to 90 billion euros if a turn in the credit
cycle triggered losses comparable with those seen a decade ago.
The brokerage also said it had lowered 2008-2010 estimates
for over 40 banks and cut price targets on a number of them,
including Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>,
Deutsche Bank <DBKGn.DE> and UBS <UBSN.VX>.
Royal Bank, Barclays, HBOS <HBOS.L>, HSBC <HSBA.L> and
Standard Chartered <STAN.L> were down between 1.4 and 3.2
percent.
"My gut feeling is that the banks are ready to turn the
corner, but they are so susceptible. If there is another change
in sentiment to the downside, then banking stocks are liable to
get absolutely hammered again. They are very risky," said Tim
Hughes, head of sales trading at IG Index.
Bradford & Bingley <BB.L> fell nearly 10 percent after the
mortgage lender said it planned to increase its rights issue to
400 million pounds ($794 million) after U.S. private equity firm
TPG Capital pulled out of a plan to buy a stake. []
MINERS SLIP
Miners were the biggest loser on the FTSE 100, tracking
weaker metal prices. BHP Billiton <BLT.L>, Anglo American
<AAL.L>, Vedanta <VED.L>, Antofagasta <ANTO.L> and Rio Tinto
<RIO.L> fell between 1.1 and 3.2 percent.
Crude prices fell more than $1 a barrel, but stayed within
range of the record highs hit in the previous session of just
under $146 a barrel. Prices have jumped about 50 percent this
year, with recent gains made on heightened tension between
Israel and Iran.
However, energy stocks gained, with BP <BP.L> rising 0.6
percent, Royal Dutch Shell <RDSa.L> adding 0.7 percent and
Tullow Oil <TLW.L> gaining 0.4 percent.
Firm crude prices fanned existing concerns about inflation,
as price pressures threaten to jeopardise earnings and curb
consumer spending.
And an uncertain economic outlook continued to cast a shadow
over the British market. An annual discretionary income study by
Ernst & Young showed the average British household is now 15
percent worse off than it was five years ago. []
Shares in Marks and Spencer <MKS.L> were down 4 percent
after hitting its lowest since late 2001 as joint house broker
Citi cut its rating to "sell" from "buy" and on soft weekly
sales data from rival John Lewis.
(Additional reporting by Dominic Lau and Steve Slater; editing
by Sue Thomas)
