* Oil majors slip as crude falls to around $64 per barrel
* Miners fall; metal prices weak
* Defensives in demand
By Tricia Wright
LONDON, July 6 (Reuters) - Declining oils and miners pushed
Britain's top share index down 1.3 percent by midday Monday, on
the back of weaker crude and metals prices as economic jitters
intensified, but losses were capped by stronger defensives.
By 1033 GMT, the FTSE 100 .FTSE index was down 56.23
points at 4,180.05, after gaining 0.1 percent on Friday.
Falling oil majors were the biggest weight on the blue-chip
index, as the crude price CLc1 fell to a five-week low below
$64 a barrel.
BG Group (BG.L) dropped 2.7 percent, while BP (BP.L) and
Royal Dutch Shell (RDSa.L) fell 2.4 percent and 2.2 percent
respectively.
The fall reflected weak showings in Asia on Monday and the
lack of a lead from Wall Street, closed on Friday for the
Independence Day holiday weekend.
"I think there's renewed concern over the rally since March;
whether it's sustainable or not," said Angus Campbell, head of
sales at Capital Spreads.
"The economic data over the last few days has not been
particularly good, so I think we're waking up to a 4th of July
U.S. holiday hangover, instigated by the non-farm payroll
figures last Thursday, and the outlook is looking a little bit
worse than previously thought," he said.
U.S. non-farm payrolls on Thursday showed the world's
biggest economy shed 467,000 jobs in June, 100,000 more than
forecast.
The FTSE 100 index has surged almost 21 percent since
hitting a six-year trough in March, though it is still down 5.7
percent for the year.
Like energy stocks, hit by lower commodity prices, miners
were also under pressure against a backdrop of lower metals
prices.
Lonmin (LMI.L), Xstrata (XTA.L), Kazakhmys (KAZ.L) Anglo
American (AAL.L) and BHP Billiton (BLT.L) shed 3.2-8.5 percent.
Rio Tinto (RIO.L) fell 4.3 percent after it agreed to sell
its Americas food-packaging assets for $1.2 billion to packaging
group Bemis (BMS.N), raising yet more much-needed cash for the
indebted miner. [ID:nSYD463954]
Banks also bore the brunt of investor pessimism. Royal Bank
of Scotland (RBS.L), Barclays (BARC.L), Standard Chartered
(STAN.L), HSBC (HSBA.L) and Lloyds Banking Group (LLOY.L)
retreated 1.5-2.6 percent.
UKFI, the body in charge of Britain's stakes in leading
banks will this week downplay expectations of a quick sale of
the shareholdings, The Sunday Telegraph reported. [ID:nL5675462]
DEFENSIVES IN DEMAND
Defensive stocks were in demand, as investors piled into
assets perceived as resilient to economic weakness.
Household products firm Reckitt Benckiser (RB.L) grabbed the
top spot on the FTSE 100 leaderboard, up 1.4 percent, while
cigarette maker British American Tobacco (BATS.L) added 0.9
percent, and food retailer J Sainsbury (SBRY.L) gained 0.9
percent.
Pharmaceutical stocks AstraZeneca (AZN.L), Shire (SHP.L),
and GlaxoSmithKline climbed 0.5-1 percent.
On the second tier, easyJet (EZJ.L) was among the biggest
gainers, up 2.2 percent following solid June traffic numbers
from the discount airline which prompt Numis Securities to raise
its rating to "add" from "hold".
After Thursday's disappointing U.S. jobs report, investors
will look to June's ISM non-manufacturing sector index, due for
release at 1400 GMT, for further clues on the health of the
economy across the Atlantic.
The U.S. corporate earnings season gets under way this week,
with results expected from oil major Chevron (CVX.N) and
aluminium producer Alcoa (AA.N).
No important domestic data was due on Monday, with the main
macro focus this week on the latest monthly Bank of England
Monetary Policy Committee meeting which starts on Wednesday with
the interest rate decision on Thursday.
(Editing by Dan Lalor)
