FTSE falls on recovery jitters; ICAP slumps

* FTSE falls 1.5 percent; miners hurt by lower metals prices

* U.S. non farm payroll data mixed

* Energy stocks fall; crude down, BG results

* BAE Systems higher on British and U.S. settlement

By David Brett

LONDON, Feb 5 (Reuters) - Britain's top share index fell 1.5 percent on Friday on fears over the health of the global recovery as U.S. employment data failed to impress, while ICAP (IAP.L) tumbled following a warning on profits.

ICAP, the world's biggest interdealer broker, topped the blue-chip fallers, down nearly 20 percent after the company said full-year earnings would miss analysts' expectations. [ID:nLDE61404V]

The FTSE 100 .FTSE closed down 78.39 points at 5,060.92, posting a weekly fall of 2.5 percent, its fourth-straight weekly decline; the index is now down 6.5 percent in 2010.

Energy stocks were led lower by BG Group (BG.L), off 3.2 percent after its fourth-quarter earnings, excluding non operations, missed expectations.

Royal Dutch Shell (RDSa.L) and BP (BP.L), which both posted disappointing quarterly results this week, each shed 0.9 percent.

Miners were also under pressure, as metals prices retreated as investors turned to the safe-haven of the dollar.

Sterling GBP= fell to an eight-and-a-half month low against the dollar as concerns over euro zone sovereign debt problems boosted the appeal of the greenback. [ID:LDE6141WC]

Xstrata (XTA.L) and Randgold Resources (RRS.L) were among the fallers, down 5.2 and 2 percent respectively and ahead of their results on Monday.

Global stock markets suffered this week on fears that troubles in Greece and other southern members of the euro zone, including Portugal and Spain, could impede or even derail an economic recovery that helped equities surge in 2009.

"This is a fear-driven fall. Jitters have spread as investors continue to fret over sovereign debt worries in Europe. Hopefully this will be short-lived," said Jimmy Yates, head of equities at CMC Markets.

Banks dropped, with Barclays (BARC.L), HSBC (HSBA.L), Lloyds Banking Group (LLOY.L), Royal Bank of Scotland (RBS.L) and Standard Chartered (STAN.L) dropping 1.2 to 5.7 percent.

The Bank of England will almost certainly revise down its growth forecasts for this year while ramping up its inflation profile when it unveils its quarterly Inflation Report on Wednesday, according to a Reuters poll. [ID:nLDE614167]

U.S. DATA MIXED

U.S. employers unexpectedly cut 20,000 in January, but the unemployment rate surprisingly fell to a five-month low of 9.7 percent, according to a government report that hinted at some labour market improvement starting to take root. [ID:nN04115255]

Europe's biggest defence contractor BAE Systems (BAES.L) was among the few risers on the FTSE 100, up 1.6 percent after the firm reached a settlement with the United States and the UK that will see it pay total fines of around $450 million, and draws a line under a long-running corruption investigation on both sides of the Atlantic. [ID:nLDE6141WV]

Compass (CPG.L) was the biggest riser, adding 5.1 percent after the caterer said it made a good start to its current fiscal year, with its rate of sales decline slowing and its pipeline of new business remaining strong. [ID:nLDE61408Z]

Liberty International LII.L was also in favour, putting on 1 percent, with the mall owner mulling a radical division of its portfolio into two separate listed companies as it battles to bounce back from the worst property crash in decades.

"When you look down at a lot of the fundamentals it's all pretty good. At the moment fear is overriding logic, but its good to have a bit volatility back in the market and we've had a bounce off the psychological 5,000 barrier," Yates said. (Editing by Rupert Winchester)