FTSE dips 0.3 percent

By Simon Falush

LONDON (Reuters) - The top share index fell 0.3 percent early on Thursday, its fourth straight day in the red, weighed by commodity stocks, as concerns about the state of the global economy resurfaced.

By 8:57 a.m. the FTSE 100 <.FTSE> was down 11.17 points at 4,320.20, having fallen 2.1 percent to 4,331.37 points on Wednesday.

The index is down 2.6 percent on the year, but has recovered 25 percent since its six-year low on March 9.

Weak U.S. retail sales data on Wednesday suggested consumers were still struggling in the face of a weakening economy, denting risk appetite and knocking equity markets globally and softening the demand outlook knocking raw material prices.

Energy and mining stocks were the main drag on the index as metal prices and crude retreated.

Rio Tinto <RIO.L>, Eurasian Natural Resources <ENRC.L>, Anglo American <AAL.L>, Lonmin <LMI.L> and BHP Billiton <BLT.L> fell between 1.6 and 4 percent.

But silver miner Fresnillo <FRES.L> and gold miner Rangold <RRS.L> added 3.2 and 3.3 percent respectively, supported by strength precious metal prices.

BP <BP.L>, Royal Dutch Shell <RDSa.L> and Cairn Energy <CNE.L> lost 0.8-2.1 percent.

"The market's down on weakness in overseas markets overnight, a further indication that the rally we saw last week has run out of steam," said Jeremy Batstone-Carr, analyst at Charles Stanley.

"We won't see the lows of March again but there is short-term worry over the health of the global economy and there's a very active debate going on between pessimistic bond traders who feel there maybe a need for more stimulus and the more positive equity traders who feel the worst is behind us."

On a busy day for corporate results, BT Group <BT.L> dropped 1.4 percent after it cut its dividend and said a further 15,000 jobs would go after a 1.58 billion pound writedown and a restructuring at its Global Services unit drove it to a fourth-quarter loss.

Engineer Invensys <ISYS.L> gained 6.4 percent after beating expectations on operating profit and resuming the payment of a final dividend.

"The market is still rewarding companies where there's robust financial management, and commitment to progressive dividend policy," Batstone-Carr said.

Infrastructure company Balfour Beatty also gained, up 1.6 percent after it forecast further progress in 2009 overall after its performance in the building sector exceeded that of last year.

Japan's Nikkei <.N225> fell to its lowest point in two weeks on Thursday as exporters slid on a firmer yen and on renewed concerns about the U.S. economy while other Asian equities were also weaker and government bonds gained.

(Addition reporting by David Brett; Editing by Dan Lalor)

Article Published: 14/05/2009