* FTSE down 1.1 percent
* Miners, oils fall as investors fear slowing growth
* Bank slide as sovereign debt worries linger
By David Brett
LONDON, Aug 3(Reuters) - Financials and commodity stocks led Britain’s top share index sharply lower on Wednesday, as worries over sovereign debt and weak economic data from the U.S. and China reignited concerns over the outlook for global growth.
The FTSE 100 shed 60.56 points, or 1.1 percent to 5,657.83, by 0806 GMT. Having closed lower for a third day in a row on Tuesday, the index is headed towards the year low of 5,591.59.
Miners bore the brunt of investors aversion to risk as concerns grew over the outlook for demand after data from China. The world’s most voracious consumer of raw materials showed its services sector grew at its slowest in three months during July.
The data was the latest sign that tight monetary policy is sending chills through the world’s second-biggest economy, and came after poor manufacturing figures from Europe and the United states over the past few days, which has sparked concerns that steps to keep control of global debt is slowing growth.
“Momentum is on the sell-side and we’re seeing quick knee-jerk reactions to bad news. Talk of a double-dip looks a little bit too drastic at the moment but growth is definitely being downgraded,” Martin Dobson, head of trading at Westhouse Securities, said.
Dobson said he sees the FTSE attacking fresh 2011 lows with 5,200 level potentially on investors’ radar, especially if the ratings agencies begin to knock their ratings for the likes of the United States.
Global miner BHP Billiton fell 2.3 percent as Credit Suisse cut its recommendation on the firm to “neutral” from “overweight”, on valuation grounds.
Precious metals miner Fresnillo , however, outperformed the broader market, up 0.8 percent as investors continued to burnish gold’s safe haven credentials and the miner as an equity proxy for the yellow metal.
Integrated oils joined the miners as sharp fallers and in tandem with a weaker crude oil LCOc1 price.
British oil explorer Cairn Energy fell 3.7 percent after it said a well off the coast of Greenland did not find oil.
Banks felt the pain too despite Asia-focused Standard Chartered , up 1.9 percent, beating forecasts with a 17 percent rise in first-half and bucking the sector trend by announcing plans to add 1,000 jobs this year.
However, worries over the sovereign debt crisis in the U.S. and Europe, and in particular Italy, lingered over the sector as Societe Generale warned it may miss profit targets for next year.
The French banks made the announcement as weak asset management revenues and a hit from its contribution to the Greek bailout took their toll on second-quarter earnings.
It wasn’t all doom and gloom for financials as Admiral gained 1.9 percent boosted by a note from Nomura, which upgraded its stance to “buy” from “neutral”.
Nomura says recent price weakness “is unwarranted, especially in view of continued strong earnings growth and a 2011E dividend yield of 5 percent; we believe current levels present a good opportunity to gain exposure to one of the quality companies in the sector.”
Elsewhere, drugmaker Shire fell 2.2 percent, lagging most other defensive stocks which perform better in risk averse markets, as BofA Merrill Lynch cut its rating on the frim to “neutral” from “buy”, on valuation grounds.
SABMiller , the world’s second largest brewer, fell 3.1 percent with traders citing a read across from U.S. peer Molson Coors Brewing Co , whose quarterly results missed expectations.
Rexam , however, rose 6.1 percent as investors toasted a 19 percent rise in first-half profit for Europe’s largest drinks can maker.
And Marks & Spencer added 1.3 percent with analysts saying that investors were switching positions out of fashion retailer Next , down 0.1 percent post results, and into Britain’s biggest clothing retailer following recent weakness.
(Editing by Andrew Callus)
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