FTSE at new 4-yr low despite bank rescue, rate cuts

* FTSE 100 falls 5.2 pct

* Banks, except HBOS and RBS, fall despite UK rescue package

* Coordinated rate cut moves fail to help

* Heavyweight commodity stocks fall on growth concerns

(Click on [nCRISIS] for more on financial turmoil)

By Simon Falush

LONDON, Oct 8 (Reuters) - Britain's top share index sank to its lowest close in over four years again on Wednesday as a 50 billion pound ($87.84 billion) injection for banks from the state and coordinated interest rate cuts from global central banks failed to lift confidence. The UK government said it would pump taxpayer funds into the embattled banking sector just hours before the Bank of England signalled a half percentage point interest rate cut in tandem with other global economies led by the Federal Reserve.

The rate cuts briefly lifted the FTSE 100 .FTSE into positive territory, but jitters resurfaced once again, and the index closed down 5.2 percent or 238.5 points at 4,366.7, its lowest close since August 2004.

The index has lost 12.3 percent so far this week and is on track for its biggest weekly fall since the crash of 1987, having shed 32.4 percent in the year to date.

Analysts said it is too early to judge whether the measures will succeed in settling the markets.

"The problem is there is too much information around, the movers in the market are traders, investors will vote over the course of the weeks and months ahead," said John Haynes, senior equity strategist at Rensburg Sheppards.

HBOS HBOS.L leapt 24.5 percent recovering a large portion of the 40 percent it lost in the previous session, supported by relief at hopes that its acquisition by Lloyds TSB (LLOY.L) was on course, traders said.

But the rest of the sector remained under pressure, with Barclays (BARC.L), Lloyds TSB, HSBC (HSBA.L) and Standard Chartered (STAN.L) losing between 2.4 and 11.5 percent.

The FTSE 350 banks index .FTNMX8350 lost 2.7 percent.

Under the bank rescue plan at least 200 billion pounds will be made available to UK banks under a special liquidity scheme, and banks will increase their total Tier 1 capital by 25 billion pounds.

The government will also provide an incremental minimum of 25 billion pounds of further support for all eligible institutions, in the form of preference shares, permanent interest-bearing shares (PIBS) or as assistance to an ordinary equity fund-raising.

U.S. stocks .SPX fell in volatile trade as investors across the Atlantic around the globe continued to brace for a serious economic slowdown.

BATTERED ECONOMY

U.S. Federal Reserve Chairman Ben Bernanke said the U.S. economy was being battered by a financial crisis of "historic dimension" and that the risk for inflation had eased with the falling prices for oil and other commodities.

Other financials fell, with insurers Prudential (PRU.L), Old Mutual (OML.L), Legal & General (LGEN.L) and Aviva (AV.L) and hedge fund Man Group (EMG.L) losing 2.7 to 5.5 percent.

Commodity stocks also sank along with base metal and crude prices CLc1 on slowing demand as global growth eased.

BP (BP.L), Royal Dutch Shell (RDSa.L) and BG Group (BG.L) dropped 4 to 6.8 percent.

Miners BHP Billiton (BLT.L), Rio Tinto (RIO.L), Anglo American (AAL.L), Eurasian Natural Resources (ENRC.L), Xstrata (XTA.L) and Vedanta Resources (VED.L) dipped 2.1 to 14.3 percent.

Sainsbury (SBRY.L) lost 14.9 percent on concerns over shoppers switching to cheaper ranges and after traders said Kaupthing had placed 168 million shares in the company at 250 pence each, thought to be on behalf of around 10 percent stakeholder, entrepreneur Robert Tchenguiz.

The supermarket group, which posted second-quarter sales towards the top of forecasts earlier in the day, declined to comment on the placing talk.

Tesco (TSCO.L), Morrison Supermarkets (MRW.L) and Kingfisher (KGF.L) also fell after going ex-dividend.

(Additional reporting by Dominic Lau; Editing by Victoria Bryan)