FTSE slides 2.9 pct as overheated miners tumble

By Rebekah Curtis

LONDON, May 20 (Reuters) - Britain's FTSE 100 .FTSE share index closed 2.9 percent lower on Tuesday, snapping a four-day rally as investors dumped overheated mining stocks, while U.S. data and surging oil prices underscored inflationary concerns.

The FTSE 100 .FTSE ended down 184.9 points at 6,191.6, its biggest one-day fall since mid-March and after gaining 1.2 percent on Monday. The UK's blue-chip index has risen 14 percent since March 17 when it hit the year's low, but is still down 4 percent in 2008.

"A pause for breath was inevitable," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. "It's ongoing uncertainty with regard to the credit crunch."

Miners swiped nearly 62 points off the index, with Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz), BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Vedanta Resources (VED.L: Quote, Profile, Research, Stock Buzz), Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz), Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz) and Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz) losing between 4.5 and 7.9 percent.

"I don't think anyone is disputing that (miners') long-term story remains intact ... but there is a concern they might have gone too far too fast," Hunter said.

Wall Street slid as the U.S. government's Producer Price Index, excluding volatile food and energy costs, rose at the fastest pace since 1991 in the year through April, hampering efforts by the Federal Reserve to shore up a weak economy.

U.S. crude oil prices leapt to a new record above $129 a barrel, adding to inflationary discomfort in global markets. But oil shares broke a recent strong run, with heavyweights BP (BP.L: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) both down about 2 percent.

Banks fell broadly, with Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) down 2.6 percent, HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) off 2.3 percent and Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) shedding 1.4 percent.