FTSE weak on euro debt fears, unclear election

* FTSE 100 down 5.6 pct on week; five-session losing streak

* Banks weak on euro zone debt woes; HSBC up on results

* Oils down; commods prices tumble on demand fears

By David Brett

LONDON, May 7 (BestGrowthStock) – Britain’s top share index was weak
in early trade Friday, but recovered somewhat from an opening
slide after sharp falls overnight on Wall Street and in Asia,
impacted by euro zone debt fears and the uncertain UK election
result.

By 0941 GMT, the FTSE 100 (.FTSE: ) was down 18.89 points, or
0.4 percent at 5,242.10, having recovered from an opening drop
to a session low of 5,160.57 after four consecutive sessions of
declines.

Overnight on Wall Street, the Dow (DJI.L: ) fell as much as 9
percent in the session before recovering to close 3.2 percent
lower, as technical trading glitches and Europe’s debt crisis
sent waves of dread through global markets.

“The events in the U.S. overnight show just how much anxiety
there is among investors. The reasons behind such a big fall
remain unclear and are also weighing on sentiment,” said Richard
Hunter, head of UK equities at Hargreaves Lansdown.

UK banks were sharp fallers on the FTSE 100, Royal Bank of
Scotland (RBS.L: ), Barclays (BARC.L: ) and Lloyds Banking Group
(LLOY.L: ) fell 2.1 to 3.2 percent.

But HSBC (HSBA.L: ) rallied, up 2.8 percent after an upbeat
first-quarter trading update. [ID:nRSG5181La]

Asia-focused peer Standard Chartered (STAN.L: ) climbed 1.2
percent.

The FTSE has shed almost 6 percent in the past week, on
track for its lowest close since mid-February, and is down 3
percent for the year-to-date, after having been up almost 8
percent at the start of April.

Investors were nervous as the outcome of the UK general
election, which could see Britain with a balanced parliament for
the first time since 1974, remained unclear leaving markets to
question the new government’s ability to tackle the country’s
huge deficit.

Britain’s opposition Conservatives look on course to be the
largest party in parliament after the closest election in three
decades, but without a clear majority, leaving it uncertain who
will eventually run the country. [ID:nUKVOTES]

Outsourcing firm Capita (CPI.L: ) fell 4.6 percent on concerns
over the impact of a balanced parliament, with Shore Capital
downgrading its rating. Peer Serco (SRCO.L: ) fell 3.1 percent.

COMMODITIES MIXED

Commodity stocks were under pressure with crude (CLc1: ) down
around $77 a barrel, off almost 10 percent on the week, and
metal prices falling across the board as investors sought the
sanctity of the greenback.

Integrated oils BP (BP.L: ), Royal Dutch Shell (RDSa.L: ) and BG
Group (BG.L: ) fell 0.7 and 2.1 percent

The UK mining sector (.FTNMX1770: ) has lost more than 9
percent in the past week, so some investors were encouraged to
go bottom-fishing in search of gains.

Miners Rio Tinto (RIO.L: ), BHP Billiton (BLT.L: ), Vedanta
Resources (VED.L: ), Xstrata (WTA.L: ) and Anglo American (AAL.L: )
added 0.5 to 1.7 percent.

British factory gate inflation rose faster than expected in
April, driven by a sharp annual rise in the price of petroleum
products, official data showed on Friday.

The Office for National Statistics said producer output
prices rose by 5.7 percent, above forecasts for an annual rise
of 4.8 percent. Input prices were 13.1 percent higher on the
year, in line with forecasts, after the biggest annual rise in
the cost of imported metals since November 2006. [ID:nONS006639]

Investors were also focused on April U.S. nonfarm payrolls,
due at 1230 GMT, which are forecast to have risen by 200,000,
after a 162,000 increase in March, with the unemployment rate
seen steady at 9.7 percent.

Investment

(Editing by Hans Peters)

FTSE weak on euro debt fears, unclear election