FTSE 100 hit by euro-zone growth fears

* FTSE down 1.7 pct; euro-zone debt hits growth outlook

* Miners, oils down; commodities drop on demand fears

* Banks fall; U.S. prosecutors investigate more banks

By David Brett

LONDON, May 14 (BestGrowthStock) – Britain’s top shares fell sharply
on Friday as investors turned to safe havens such as the dollar
and gold and out of banks, miners and commodity-linked stocks,
fearing euro-zone debt problems will curb growth.

By 1035 GMT the FTSE 100 (.FTSE: ) was down 89.76 points, or
1.7 percent, at 5,343.97, having risen 0.9 percent to 5,433.73
on Thursday to hit its highest closing level since April 30.

“Investors are having to recognise that as economies start
to get to grips with the important fiscal cuts needed to reign
in deficits, consumers will have less cash to spend and this
could impact on company earnings and economic growth,” Joshua
Raymond, market strategist at City Index said.

Banks fell on concern over exposure to euro-zone debt and
speculation about measures the new UK coalition government may
impose on banks as it tackles Britain’s bulging deficit.

HSBC (HSBA.L: ), Standard Chartered (STAN.L: ), Lloyds Banking
Group (LLOY.L: ), Barclays (BARC.L: ) and Royal Bank of Scotland
(RBS.L: ) dropped 1.4 to 4 percent.

Sector sentiment was also damaged as U.S. prosecutors are
conducting a broad criminal investigation of six major Wall
Street banks, including JPMorgan Chase & Co (JPM.N: ) and
Citigroup Inc (C.N: ), to determine if they misled investors.
[ID:nLDE64C0N0]

Overnight, downbeat comments on the economy from tech
company Cisco Systems Inc (CSCO.O: ) and retail chain Kohl’s Corp
(KSS.N: ) cast doubt on the strength of the U.S. recovery.

Investors will look stateside later in the session, where a
batch of data due for release will give a clearer indication of
how the United States’s recovery is faring.

April U.S. retail sales numbers will be released at 1230
GMT, April U.S. industrial output figures are due at 1315 GMT,
the first reading for May’s Thomson Reuters/University of
Michigan consumer sentiment index is out at 1355 GMT, and U.S.
business inventories for March will be released at 1400 GMT.

U.S. futures for the Dow Jones industrial average (DJc1: ),
the S&P 500 (SPc1: ) and the Nasdaq 100 (NDc1: ) all point to a
weaker start on Wall Street on Friday.

COMMODITY RETREAT

Commodity-linked stocks slid as crude (CLc1: ) dropped to near
$73 a barrel and metals prices fell across the board between 2.3
and 3.2 percent, as euro zone growth prospects smeared the
outlook for demand.

Among energy issues, BP (BP.L: ), Royal Dutch Shell (RDSa.L: )
and BG Group (BG.L: ) were down 1.6-3 percent.

Miners Xstrata (XTA.L: ), Kazakhmys (KAZ.L: ), Antofagasta
(ANTO.L: ) and Rio Tinto (RIO.L: ) fell 3.7 to 6 percent.

The sector (.FTNMX1770: ) is around 17 percent off 2010 highs
hit in late March amid concerns over potential China monetary
tightening and euro zone debt issues.

Proof of investor jitters over euro zone debt contagion came
with gold hovering near its all-time high and the greenback
remaining strong against a basket of currencies, both
traditional safe havens.

Portugal and Spain took steps to trim their budget deficits
on Thursday, offering reassurance the euro zone was addressing
deep-rooted fiscal problems. [ID:nLDE64B0SK]

Yet the head of Deutsche Bank (DBKGn.DE: ) in a TV interview
broadcast after Thursday’s market close cast doubt on Greece’s
ability to repay its debts. [ID:nLDE64C1NV]

On the upside, Wolseley (WOS.L: ) was the standout blue-chip
gainer, up 6.6 percent after the building materials distributor
said it anticipates beating market expectations for the full
year, prompting Seymour Pierce to raise its estimates.

Stock Market Basics

(Editing by Simon Jessop)

FTSE 100 hit by euro-zone growth fears