REFILE-UK’s FTSE 100 drops on euro-zone debt fears

(Corrects to remove superfluous words in headline)

* FTSE down 1.1 percent; euro-zone debt hits growth outlook

* Miners, oils fall as commodities retreat

* Banks wane; US prosecutors investigate mortgage bond deals

By David Brett

LONDON, May 14 (BestGrowthStock) – Britain’s top shares fell in
early trade on Friday as concerns over euro-zone debt problems
and the fiscal austerity measures needed to tackle them weighed
on banks and miners, while commodities prices retreated.

By 0818 GMT the FTSE 100 (.FTSE: ) was down 57.57 points, or
1.1 percent, at 5,376.16, having risen 0.9 percent to 5,433.73
on Thursday to hit its highest closing level since April 30.

“There’s a real feeling of concern over sovereign debt that
many European countries will not be able to repay on schedule
and we have a serious problem with this and it is going to
affect growth,” David Buik, senior partner at BGC Partners,
said.

The blue chip index is up around 5 percent on the week so
far, recovering most of last week’s 7.7 percent fall.

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]

Commodity-linked stocks were among the hardest hit as crude
(CLc1: ) anchored near $74 a barrel and metals prices fell across
the board between 1 and 1.9 percent, as euro zone growth
prospects smeared the outlook for demand.

Among energy issues, big gainers in the previous session,
Royal Dutch Shell (RDSa.L: ) and BG Group (BG.L: ) were down 1.2 and
0.6 percent respectively.

BP (BP.L: ) shed 1 percent as political pressure mounted for
the energy group to show progress in plugging a massive Gulf of
Mexico oil leak. [ID:nN14273981]

Miners also clipped Thursday’s gains, with Xstrata (XTA.L: ),
Kazakhmys (KAZ.L: ), Antofagasta (ANTO.L: ) and Rio Tinto (RIO.L: )
down 1.4 to 3.8 percent.

The sector (.FTNMX1770: ) is around 15 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.

BANKS WANE

Banks were the biggest losers. The sector has endured a
mixed week with investors speculating on potential 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 0.9 to 2.7 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]

On the upside, Wolseley (WOS.L: ) was the standout blue chip
gainer, up 7.5 percent after the building materials distributor
said it anticipates beating market expectations for the full
year, prompting Seymour Pierce to raise its estimates.

No domestic economic data is scheduled for release on
Friday, so investor attention will be drawn later in the session
to a batch of key U.S. data.

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.

Investment Research

(Editing by David Holmes)

REFILE-UK’s FTSE 100 drops on euro-zone debt fears