FTSE down, oils drag as U.S. sentiment weighs
* FTSE 100 down 0.8 pct
* Energy stocks weighed by falling oil prices
* U.S. consumer sentiment softens
By David Brett
LONDON, July 10 (Reuters) - UK blue-chip stocks ended a fourth consecutive week in negative territory on Friday as U.S. data heaped more gloom on the global economic outlook, with energy stocks weighing most on Britain's top share index.
The FTSE 100 .FTSE closed down 31.49 points, or 0.8 percent, at 4,127.17, for a weekly loss of 2.3 percent, its lowest closing level since April 28.
"The fundamentals haven't been all that encouraging today -- the U.S. trade balance has contracted further showing waning demand domestically," said Giles Lee, senior dealer at CMC Markets.
The U.S. trade gap narrowed unexpectedly to $26 billion in May to the lowest reading since November 1999 as exports rose in spite of weak global demand and imports shrank. [ID:nN10403474]
"The Michigan consumer confidence reading has plummeted whilst falling output prices in the UK are painting a bleak picture for domestic inflation in the months ahead."
The Reuters/University of Michigan preliminary July consumer sentiment survey posted at 64.6 from 70.8 in June. [ID:nNnN10508844].
Energy stocks slid as oil prices CLc1 kept below $60 per barrel, on track for its largest weekly fall since January.
BP (BP.L), Royal Dutch Shell (RDSa.L), BG Group (BG.L), Tullow Oil (TLW.L) and Cairn Energy (CNE.L) fell between 0.8 and 1.5 percent.
The latest report from the International Energy Agency predicted an increase in oil consumption in 2010, but expected it to stay negative in 2009 and saw limited demand for OPEC crude. [IEA/M]
Chevron's (CVX.N) warning about second-quarter results also weighed on the sector, with U.S. stocks dropping on jitters that an economic recovery and corporate profits will be anaemic.
Traders said earnings from U.S. and European companies over the next few weeks would be critically important in determining market direction.
INSURERS, DRUGMAKERS HIT
Aviva (AV.L) was the index top faller, off 4.9 percent on lingering speculation that the life insurer is going to cut its dividend. [ID:nLA663897]
The uncertainty spread to other life insurers as Standard Life (STAN.L), Prudential (PRU.L), Legal and General (LGEN.L) and Old Mutual (OML.L) dropped between 2.7 and 3.2 percent.
Drugmakers also took a beating, with AstraZeneca (AZN.L), GlaxoSmithkline (GSK.L) and Shire (SHP.L) down between 1.1 and 1.5 percent.
Miners were dealt a blow by weak metal prices, with Rio Tinto (RIO.L), Kazakhmys (KAZ.L), Eurasian Natural Resources (ENRC.L), Lonmin (LMI.L) and BHP Billiton (BLT.L) falling between 1.4 and 3.3 percent.
Rio Tinto (RIO.L) was the second sharpest blue-chip faller, dogged by the detention of four employees by Chinese authorities for leaking China's "bottom line" in iron ore price negotiations, according to a source with knowledge of the probe. [ID:nSP473911]
Retailers were broadly higher, with traders citing the low interest rate environment and positive broker commentary from the previous session as supportive.
Tesco (TSCO.L) was the top riser, up 2.5 percent, followed closely by Home Retail (HOME.L), up 2 percent.
Wm Morrison Supermarkets (MRW.L), Kingfisher (KGF.L), Next (NXT.L) and Marks and Spencer (MKS.L) added 1-2 percent.
Among other stocks in positive territory, publishing group Pearson (PSON.L) advanced 1.5 percent after Credit Suisse upgraded it to "outperform" from "neutral". (Editing by Simon Jessop)
