* FTSE 100 falls 0.2 percent
* Miners hit by Randgold profit drop, China growth fears
* Recent gains leaves ECB rate cut priced in by markets
* BG gains after good earnings, says projects on track
By Alistair Smout
LONDON, May 2 Mining stocks dragged Britain's
top shares lower on Thursday following a disappointing update
from Randgold that set the tone.
The market was also focussed on an expected interest rate
cut from European Central Bank.
Randgold Resources fell 4.1 percent after the
precious metals miner posted a steeper-than-expected fall in
profit, hit by a drop in sales and lower prices.
Weak factory-sector growth in China also weighed on the
mining stocks, which traded 1.4 percent lower as a sector. Local
media in China reported that the government was considering
downgrading its GDP target.
"With Japan's and the EU's growth stalled, China's recovery
is now even more linked to the success of the U.S. generating
momentum in its economy and ... those concerns have returned,"
said Ioan Smith, director at Knight Capital.
By 0753 GMT, the FTSE 100 was down 13.79 points, or
0.2 percent, at 6,437.50, with the mining sector providing four
of the top seven fallers.
Concerns over fiscal tightening in the United States, known
as the "sequester", were compounded when Federal Reserve
Chairman Ben Bernanke said fiscal policy was "restraining
economic growth", and gave no hints of additional asset
purchases to support the economy.
Easy monetary policy has supported equity markets globally
over the last year, and in Europe, expectations of a euro-zone
rate cut to stimulate economic activity have helped push the
FTSE up 2.9 percent over the last 10 days.
"With an ECB rate cut priced in, a sombre tone from the Fed
and almost daily economic reminders that the global economy is
stuttering, it looks like investors have seen enough and are
trying to take profits where they can," said Mike McCudden, head
of derivatives at Interactive Investor.
Lending support to the FTSE were several upbeat company
updates, including from BG Group, Royal Dutch Shell
and Smith & Nephew.
BG led gainers, up 2.9 percent after it delivered
better-than-expected quarterly earnings and gave reassurance
that its huge growth projects were on track.
(Editing by Jeremy Gaunt.)