FTSE ends down 1.2 pct

LONDON (Reuters) - The blue chip share index ended down 1.2 percent on Wednesday, as confidence of a quick global economic recovery ebbed, with commodity stocks down on weaker raw material prices but drugmakers and telecoms gaining.

The FTSE 100 .FTSE closed 50.11 points lower at 4,278.46, after putting on 0.1 percent on Tuesday to break a two-session losing run.

Volumes on the benchmark were about 91 percent of its 90-day average daily volume.

"The key thing is that there is a complete lack of clarity as to the state of the underlying economy both here and in the America," said Tim Whitehead, head of portfolio strategist at Leeds-based Redmayne-Bentley.

"Although it would be nice to call a bottom of the economic nadir, we are not there yet. We have no evidence to support a sustained market rally from here."

He said he expected the market to trade in a range until after August when many fund mangers returned from holiday.

Miners were the biggest drag on the index, although metal prices recovered earlier losses to trade up in the afternoon.

Antofagasta (ANTO.L), Lonmin (LMI.L), Xstrata (XTA.L), Rio Tinto (RIO.L), Kazakhmys (KAZ.L), Vedanta Resources (VED.L) and Eurasian Natural Resources (ENRC.L) fell 6.5 percent to 10.2 percent.

Softer crude also hurt oil producers, with BP (BP.L), Royal Dutch Shell (RDSa.L), BG Group (BG.L) and Cairn Energy (CNE.L) losing between 0.8 and 3.6 percent.

European shares .GDAXI .FCHI also ended sharply lower.

U.S. consumer prices edged up in May on higher petroleum prices, but fell over the past 12 months by the most since 1950, in a sign that inflation was no threat for now as the country fights recession.

In the UK, the number of Britons claiming jobless benefit rose less than expected in May but the rise was still enough to push the unemployment rate to its highest in more than a decade.

CASH CALL

Sainsbury (SBRY.L) was among the heaviest fallers on the FTSE 100, down 5.7 percent. The country's third largest grocer raised about 432 million pounds to accelerate its expansion, as it posted first-quarter sales at the top end of expectations.

The move to place new shares and convertible bonds also dragged on peers WM Morrison (MRW.L) and Tesco (TSCO.L), which fell 1.7 and 1.6 percent respectively.

Banks were also weaker, with Barclays (BARC.L), Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L) down 2.5 percent to 3.2 percent. But HSBC (HSBA.L) advanced 0.7 percent.

"We've had an aggressive move to the upside and there's profit taking going on as it looks as through the rally has moved too far too fast," said Henk Potts, strategist at Barclays Wealth.

The UK index, which is down 3.5 percent this year, has rallied 23.6 percent since hitting a six-year trough on March 9.

Defensive pharmaceuticals stocks were in demand on Wednesday, with Shire (SHP.L) up 1.6 percent on expectations its drug Replagal will benefit from production problems at U.S. rival Genzyme (GENZ.O).

This benefits Shire as it makes rival drug Fabrazyme.

Within the sector, AstraZeneca (AZN.L) and GlaxoSmithKline (GSK.L) added 2.5 and 0.7 percent respectively.

BT Group (BT.L) was up 3 percent supported by the British government's plans to impose a levy of 50 pence a month on copper phone lines. BT is expected to take a leading role in the broadband expansion.

Index heavyweight Vodafone (VOD.L), also seen as a defensive stock, put on 3.7 percent.

(Additional reporting by Simon Falush; Editing by Jon Loades-Carter)