FTSE falls 2.5 pct on U.S. jobs, euro zone data

                                
 * Energy stocks weigh as crude oil falls 3.6 percent
                                
 * Miners track cheaper metals; drugmakers, banks slip
                                
 
                                
 By Farah Master
                                
 LONDON, July 2 (Reuters) - Britain's leading share index
closed 2.5 percent lower on Thursday, with market sentiment hit
by data showing U.S. employers cut more jobs than expected in
June and unemployment in Europe hit a 10-year high.
                                
 The FTSE 100 <.FTSE> index ended down 106.44 points at
4,234.27 after closing 2.2 percent higher on Wednesday, the
first day of the new quarter.
                                
  Data showed the world's biggest economy lost 467,000 jobs
in June, 100,000 more than expected by economists and breaking a
four-month trend of slowing U.S. job losses. [ID:nSP476861]
                                
 "This proves that we may not be at the bottom yet. The
world's biggest economy, as we know them, is going to be dragged
down," said Philip Gillette, a sales trader at IG Index.
                                
 The energy sector, which gained in the previous session on
higher oil prices, took the most points off the index as crude
fell more than $2 to trade below $67 a barrel. [ID:SYD481718]
                                
 BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L> and
Tullow Oil <TLW.L> fell 1.9-3.3 percent.
                                
"Sentiment has changed over the last two or three weeks, from
being very bullish to people realising the fundamentals are not
that rosy," said Gillette.
                                
 Lower metal prices helped push miners down, shedding some of
the recent gains. Randgold Resources <RRS.L>, Eurasian Natural
Resources <ENRC.L>, Anglo American <AAL.L>, Lonmin <LMI.L> and
BHP Billiton <BLT.L> fell 3.1-4.7 percent.
                                
  Rio Tinto fell 5.7 percent. It completed the British leg of
its $15.2 billion rights offer, putting the world's top iron ore
miner back into growth mode after slashing its debt.
[ID:nSYD476934]
                                
 
                                
 UNEMPLOYMENT RISES
                                
 British data showed a decline in activity in the
construction sector accelerated in June, and lenders said they
did not expect much of a pick-up in demand in the third quarter.
[ID:nL2724271]
                                
 Data showing the jobless rate in the 16-nation euro zone
rose to 9.5 percent in May, the highest since 1999, also weighed
on the FTSE. [ID:nL2714438]
                                
 "I certainly think unemployment will continue to rise over
the next few months and maybe into next year, and this will
bring its own negative impact on aggregate demand," said Jeremy
Batstone-Carr, analyst at Charles Stanley.
                                
 The fall in equity prices was broad-based, with defensive
drugmakers and banks also among those into negative territory.
                                
  AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L> and Shire
<SHP.L> fell 2.4-2.8 percent.
                                
 Heavyweight HSBC <HSBA.L> was 1.8 percent lower, while
Lloyds Banking Group <LLOY.L>, Royal Bank of Scotland <RBS.L>
and Standard Chartered <STAN.L> fell 2.1-3.4 percent.
                                
 WPP Group <WPP.L> slipped 7 percent, the biggest loser on
the index, as Citigroup downgraded the advertising group's
rating to "sell" from "neutral" with a reduced target price of
340 pence, down from 440 pence.
                                
 With most stocks down on the day, the world's biggest
spirits group Diageo <DGE.L> topped the risers chart, up 0.9
percent, as traders continued to view its decision, announced on
Wednesday, to close two Scottish plants as a good move in the
current downturn. [ID:nL1225622]
 (Editing by Dan Lalor)