Commodity stocks pulled the top share index lower by midday Wednesday, as poor data from China heightened concerns over global growth, while a disappointing German bond sale increased investor uncertainty.

London's blue chip index <.FTSE> was down 26.87 points, or 0.5 percent, to 5,179.95 by 11:56 a.m.. The index is down 6.6 percent so far in November as concerns global debt problems were seen as significantly impacting the economic growth outlook.

London-listed mining and integrated oil stocks led the top share index lower after data overnight from China sparked growth concerns in the world's fastest growing economy.

HSBC's preliminary China manufacturing survey fell to a 32-month low in November, well below analysts' forecasts, with the reading signalling the sector is now contracting.

We would suggest that the risks are that the slowdown in evidence from Europe, with the widely reported issues over trade finance provided by European banks on Asia, may well be having an early impact on the growth dynamic of the Chinese economy, Shore Capital's Gerard Lane said.

The data from China weighed on commodity prices across the board with U.S. crude oil falling more than $2 as the demand outlook grew evermore bleak.

Global debt and economic recovery concerns continue to weigh on all asset classes. Germany's Debt Agency blamed nervous markets after it was forced to retain a huge portion of a new 10-year Bund issue as bids fell short.

Banks, which have big exposure to the debt problems in Europe and the U.S., were weaker as investors deserted riskier assets.

Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers said he sees markets drifting lower but investors have not yet priced in a possible break-up of the euro zone.

The longer this (euro zone uncertainty) goes on, the less likely investors are to open new positions with markets this volatile, which explains the (weak) volumes we've been seeing.

There is little doubt that we're going to drift and drift lower until some kind of concrete plans show themselves.


Bank of England policymakers said the chances of a worst-case outcome for the euro zone crisis had increased over the past month, and were split on the likelihood of a further increase to its quantitative easing programme.

Despite corporates flexibility in being able to adapt to austere environments more quickly than governments, analysts remain concerned over the outlook for earnings.

Meggitt slipped 2.9 percent as UBS cut its rating on the aircraft parts supplier to sell from neutral and reduced its earnings forecasts, following a recent update.

Analysts' remain downbeat on the outlook for corporate profitability.

According to Thomson Reuters data earnings momentum -- analysts' upgrades minus downgrades as a percentage of total estimates -- for FTSE 100 companies is -8.3 percent, versus -10.8 percent a month ago.

Ex-dividend factors knocked 4.72 points off the FTSE 100 index Wednesday, with Carnival , HSBC , Man Group and Next all trading without their payout attractions.

Wall Street futures pointed to a weaker open for U.S. equities later, ahead of a raft of data scheduled for release, before the Thanksgiving Day holiday Thursday when U.S. equity markets are closed.

Highlights Wednesday include U.S. October durable goods and U.S. weekly jobless claims, both out at 1:30 p.m., and the final November Reuters/University of Michigan consumer sentiment index, due at 2:55 p.m.

On the upside on the FTSE 100, Johnson Matthey , the world's largest supplier of catalytic converters, showed resilience in the face of worsening economic conditions, gaining 1.3 percent after posting a 24 percent rise in first-half profit.

Defensive stocks dominated the FTSE 100 leader board, with Reckitt Benckiser , Centrica , SSE and Imperial Tobacco enjoying gains of 0.5-0.8 percent.

(Additional reporting by Tricia Wright; Editing by Mike Nesbit)