FTSE dips as commodities drop offsets banks rally

Fri Jul 18, 2008 4:26am EDT

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* FTSE falls 0.2 pct as commodities weigh

* Banks rise, adding to previous day's rally

* Investors eye Citigroup results

By Rebekah Curtis

LONDON, July 18 (Reuters) - British blue-chip stocks slipped on Friday, as commodities reversed the previous day's hefty gains, offsetting a rally in banks.

By 0758 GMT the FTSE 100 .FTSE was down 0.2 percent at 5,277.6. The index closed up 2.6 percent on Thursday, when a surge in battered banks was fuelled largely by better-than-expected results from U.S. bank JP Morgan (JPM.N: Quote, Profile, Research, Stock Buzz).

Commodities shares were the biggest losers. Oil major BP (BP.L: Quote, Profile, Research, Stock Buzz) dropped 0.3 percent and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) fell 0.5 percent, as crude prices traded well down from recent highs.

Among miners, Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) shed 3.5 percent, while BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) both fell 2.5 percent. Continued...