FTSE slips as Citi, Goldman dent banks

By Simon Falush

LONDON (Reuters) - The top share index closed lower on Thursday as banks fell after U.S. banking earnings failed to meet some expectations, while miners tracked metal prices down.

Bucking the trend, J Sainsbury (SBRY.L) was the day's biggest gainer on talk of a bid from Qatar.

The FTSE 100 .FTSE ended down 0.6 percent, or 33.15 points at 5,222.95, retreating from a 56-week closing high set on Wednesday.

Although third-quarter earnings from Goldman Sachs (GS.N) and Citigroup (C.N) came in better than analysts' forecasts, they were disappointing relative to the much stronger than expected results from JPMorgan (JPM.N) on Wednesday.

Barclays (BARC.L), HSBC (HSBA.L), Standard Chartered (STAN.L), Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L) fell 0.4-2.1 percent.

"We're being firmly dictated by the earnings season," said Joshua Raymond, market strategist at City Index.

"The spectacular results from JP Morgan may well be having a derogatory effect as the Goldman Sachs and Citi results didn't live up to them."

Miners fell with profit takers moving in as metal prices retreated. Rio Tinto (RIO.L), Lonmin (LMI.L), Anglo American (AAL.L) and Fresnillo (FRES.L) fell 0.7-4.1 percent.

Anglo American (AAL.L) was the biggest faller, down 4.1 percent, after rival Xstrata (XTA.L) said it would not make a formal takeover offer.

Energy stocks were lower as investors banked profits, though oil prices continued to climb. BG Group (BG.L), Royal Dutch Shell (RDSa.L), BP (BP.L) and Cairn Energy (CNE.L) shed 0.6-2.4 percent.

Tullow Oil (TLW.L), which said in a drilling update the Mahogany-4 well off Ghana had found oil, dropped 2.3 percent.

The FTSE 100 has surged 51 percent from a six-year trough in March, but is still 3.6 percent below its level in mid-September 2008 before the collapse of Lehman Brothers.

Sterling racked up its biggest one-day gain against a basket of currencies in nearly a year after Monetary Policy Committee member Paul Fisher told the Financial Times the Bank of England's interest rate cuts and injection of money into the economy were working.

SAINSBURY SURGES

Food retailer J Sainsbury (SBRY.L) topped the FTSE leaderboard, up 10.1 percent with traders citing talk of a bid from Qatar, though Sainsbury and the Qatar Investment Authority declined to comment.