FTSE falls on Europe debt, bank tax concerns

* FTSE 100 down 1.0 percent

* Banks weak on Europe debt concerns, tax fears

* Oils weak; BP falls on oil slick worry

By David Brett

LONDON, June 8 (BestGrowthStock) – Britain’s top shares were lower
by midday on Tuesday, as Europe’s debt troubles and the threat
of punitive taxes hit banks, while BP’s (BP.L: ) Gulf of Mexico
oil disaster dragged on the stock and sector sentiment.

By 1123 GMT, the FTSE 100 (.FTSE: ) was down 51.76 points, or
1.0 percent, at 5,017.30, having recovered from an intraday low
of 4,990.60.

UK-focused banks were poor performers as twin worries over
euro zone debt exposure and the threat of possible levies on
lenders hung over them.

European finance ministers sought agreement on Tuesday on
how to make banks pay for financial crises. [ID:nLDE6570M1]

Lloyds Banking Group (LLOY.L: ), Barclays (BARC.L: ) and Royal
Bank of Scotland (RBS.L: ) fell 1.4 to 2.4 percent. However,
global banking giant HSBC (HSBA.L: ) added 0.3 percent, helping
limit the sector’s overall fall.

Meanwhile, in a direct warning to British investors, ratings
agency Fitch said the UK faced a formidable fiscal challenge,
sending the cost of protecting British government debt against
default higher. [ID:nWLA5820]

“Growth is going to hard to achieve anyway, (that) coupled
with austerity measures all round Europe have resulted in an
almost inevitable double-dip recession,” Jeremy Batstone-Carr,
head of research at Charles Stanley said.

Debt fears have cost Britain’s blue-chip index around 800
points, or 13.8 percent, since mid-April.

COMMODITY RETREAT

Energy shares were the biggest blue-chip fallers, led by BP
(BP.L: ) as the oil spill crisis in the Gulf of Mexico, along with
global growth issues, drained confidence from the sector.

BP was down 3.9 percent, while peers Royal Dutch Shell
(RDSa.L: ) and BG Group (BG.L: ) lost 1.4 and 1.5 percent
respectively.

Miners pared an early rally, spurred by investors on the
hunt for bargains, as macroeconomic worries took their toll
fuelling concern about demand. Kazakhmys (KAZ.L: ), Rio Tinto
(RIO.L: ) and Vedanta Resources (VED.L: ) dropped 1.0-2.2 percent.

Among individual fallers, Tesco (TSCO.L: ) shed 2.8 percent as
investors reacted uncertainty after Terry Leahy, the retailer’s
long-standing boss, announced his surprise resignation.

Tesco said he will be succeeded by lifelong company man and
head of international business Philip Clarke.

On the upside, the top gainer was power generator rental
group Aggreko (AGGK.L: ), up 3.5 percent, after it said full-year
performance should be significantly better than expected as it
benefited from contract wins including for the soccer World Cup.

Aggreko also benefited from hopes for a possible bid war at
mid-cap peer Chloride (CHLD.L: ), up 18.5 percent as investors bet
that U.S. firm Emerson (EMR.N: ) could counter an agreed takeover
offer for the British firm from ABB (ABBN.VX: ).

Takeover interest also saw blue-chip security firm G4S
(GFS.L: ) climb 1.8 percent higher, extending gains made in the
previous session.

The Daily Mail’s Market Report on Tuesday cited revived
rumours that a private equity consortium led by Kohlberg Kravis
Roberts is lining up a 5.3 billion cash offer worth 375 pence a
share for the security provider.

Stock Market Basics

(Editing by Erica Billingham)

FTSE falls on Europe debt, bank tax concerns