- Energy stocks fall as demand outlook weakens * Banks under pressure, hit by Dubai worries
- Travel firms mixed after Thomas Cook results
By Tricia Wright
LONDON, Nov 30 (Reuters) - Britain's top share index was 0.8 percent lower by midday on Monday, pulled down by weak energy stocks and banks, as investors were troubled by lingering anxiety caused by Dubai's debt problems.
By 1212 GMT, the FTSE 100 .FTSE was down 40.89 points at 5,204.84, having added 1 percent on Friday.
The index suffered a 3.2 percent drop on Thursday, its biggest one-day percentage fall in eight months, after Dubai sought a debt standstill for state-owned Dubai World.
The United Arab Emirates offered banks emergency support on Sunday, the first steps to ease fears that a looming debt default by two of Dubai's flagship firms could derail the global economic recovery. [ID:nGEE5AS0AH]
The problems severely dented the Dubai equity market on Wednesday, with the benchmark .DFMGI ending down 7.3 percent. [ID:nSP362937]
Energy stocks were the biggest drag on the index with crude prices CLc1 nearly $4 below the $80 per barrel level set earlier in the month.
BG Group (BG.L), BP (BP.L), Royal Dutch Shell (RDSa.L), and Tullow Oil (TLW.L) were off 0.7 to 1.6 percent.
Banks were mostly weaker amid ongoing concerns over potential exposure to Dubai's debt.
Lloyds Banking Group (LLOY.L) was a top blue-chip faller, down 5.8 percent as brokers adjusted target prices with the stock trading ex-rights, while Barclays (BARC.L), Standard Chartered (STAN.L), and Royal Bank of Scotland (RBS.L) shed 1.1 to 4.6 percent.
Heavyweight HSBC (HSBA.L) bucked the sector trend, gaining 0.3 percent after a BofA Merrill Lynch upgrade to buy from neutral.
London Stock Exchange (LSE.L), in which Borse Dubai holds a sizeable stake, shed 1 percent.
The United Arab Emirates central bank commitment to providing liquidity for lenders has gone some way to help shore up confidence amongst investors, said Tim Hughes, head of sales trading at IG Index.
In the light of this, today's move in London could equally just be put down to a normal pullback after Friday's rise, he said.
U.S. stock index futures edged lower on Monday, with Wall Street seen extending the previous session's sharp retreat.
It was a mixed picture among miners, however, with some stocks limiting losses as firmer metals prices lent support.
Lonmin (LMI.L) and Kazakhmys (KAZ.L) fell 1.8 and 1.5 percent, respectively, but Anglo American (AAL.L), Antofagasta (ANTO.L) and BHP Billiton (BLT.L) added 0.1 to 0.6 percent.
Travel companies were also mixed. Thomas Cook (TCG.L) slipped 0.7 percent as investors focused on its warning that trading conditions could become even more challenging in 2010 as it posted above-forecast first-half results. [ID:nGEE5AQ223]
Peer TUI Travel (TT.L) was a top FTSE 100 riser, up 1.9 percent, with investors confident that its fourth-quarter results, due on Tuesday would be strong.
Reminding investors of the difficult domestic environment, British consumer confidence unexpectedly fell this month for the first time since January, slipping back to its lowest level since August, a monthly survey by GfK NOP for the European Commission showed [nGEE5AQ21J].
However, the housing market in England and Wales strengthened modestly in November, with the smallest year-on-year drop in house prices since May 2008, a survey by property data company Hometrack showed [nGEE5AQ123].
Britain's services companies turned in a weaker-than-expected performance in the third quarter but are more optimistic about the future, a survey by the Confederation of British Industry showed [nGEE5AQ1NK].
Data from the United States due for release on Monday include the Institute for Supply Management New York business activity numbers at 1330 GMT, Chicago PMI data at 1445 GMT and U.S Midwest manufacturing data at 1700 GMT. (Editing by Karen Foster) ((firstname.lastname@example.org. +44 20 7542 8114) Reuters Messaging: email@example.com))