FTSE slips as miners fall, offsetting builders

                                
 * Miners lower as investors take profits
                                
 * Housebuilders boosted by report of Barratt funding deal
                                
 * Oil stocks supported by recovering oil prices
                                
 
                                
 By Simon Falush
                                
 LONDON, June 20 (Reuters) - Britain's top share index fell
more than 1 percent by midday on Friday as weaker mining stocks
led by Anglo American <AAL.L> and falling banks outweighed solid
gains in housebuilders.
                                
 By 1116 GMT, the FTSE 100 <.FTSE> was down 60.6 points, or 1
percent, at 5,647.8. The index has fallen 6.8 percent this month
and 12.3 percent in 2008.
                                
 Banks were weaker, with shares in Britain's largest mortgage
lender <HBOS.L> falling 2.4 percent after an almost 7 percent
drop on Thursday, as analysts cut price targets and estimates
and predicted further deterioration in the UK housing market.
                                
 Miners fell on profit-taking, with Anglo American <AAL.L>
losing 2.8 percent after gaining about 15 percent in the past
five sessions. BHP Billiton <BLT.L> slipped 1.9 percent.
                                
 "The FTSE is continuing its trade-off between a weaker
domestic economy, which is hitting the banks, and the strength
of the resources sector," said Roger Cursley, UK strategist at
Investec. 
                                
 Building materials distributor Wolseley <WOS.L> was the top
loser in the FTSE 100, down 4.3 percent after Morgan Stanley
downgraded its rating on the company.
                                
 Housebuilders were up broadly after Building Magazine
reported that Barratt <BDEV.L> had reached an agreement with
banks over funding. 
                                
 FTSE 250 listed Barratt was up 17.2 percent while Persimmon
<PSN.L> topped the blue-chip index gainers, up 7.1 percent.
                                
 "We've had such a torrid time in recent days ... it's going
to be a day of consolidation heading into the weekend," said
Peter Dixon, economist at Commerzbank.
                                
 However he remained negative on the longer term outlook for
the sector.
                                
 "From a stock point of view, the housing sector looks pretty
awful for the next couple of years."
                                
 
                                
 OIL SHARES GAIN 
                                
 Among oil companies, Royal Dutch Shell <RDSa.L> rose 0.8
percent after oil prices rose by a dollar on Friday after losing
more than $5 the previous day. 
                                
 UK airlines British Airways <BAY.L> and easyJet <EZJ.L> both
gained, however, as investors seemed relieved that oil was off
the highs near $140 set earlier in the week. 
                                
 "The oil price has come off a bit from the highs and perhaps
there's some feeling that some parts of the airline industry are
oversold," said Nick Van den Brul, transport analyst at Exane
BNP Paribas.
                                
 Shares in drug company GlaxoSmithKline <GSK.L> held steady,
shrugging off a Wall Street Journal report that the U.S.
Department of Justice widened its investigation into whether it
held data about the suicide risks of the antidepressant drug
Paxil. [ID:nN20412405]
                                
 Barclays <BARC.L> reversed early gains to fall 2.1 percent
after sources said Japan's Sumitomo Mitsui Financial Group Inc
<8316.T> may invest about $926 million in Britain's third
largest bank. [ID:nT157641]
                                
 Royal Bank of Scotland <RBS.L> fell 2.3 percent while Lloyds
TSB fell 2.1 percent <LLOY.L>.
  (Additional reporting by Rebekah Curtis; Editing by Paul
Bolding)