Top share index dropped back on Thursday led by weaker oil and bank stocks as worries over global economic growth weighed on sentiment, prompting investors to take profits after a strong run in the first quarter.

At 10:13 a.m., the FTSE 100 <.FTSE> index was down 49.73 points, or 0.9 percent, at 5,759.26, extending its falls into a third straight session after Wednesday's 1 percent drop, and just holding at the month's low point of 5,755 hit on March 7.

The UK blue chip index is on course to post a fall of around 1.8 percent in March after a choppy month which saw it rally to its highest levels since July 2011 before dropping back.

The March decline will snap a three-month long winning streak, and reduce first-quarter gains to about 3.5 percent, after a near 5.4 percent rise in the first two months of the year which had almost erased the 2011 decline of 6.7 percent.

The markets have had a terrific run of late so a drop was always inevitable. The catalysts at the fore being sliding global growth stemming from China and prompting anticipation of even deeper misery for the euro zone, said Mike McCudden, head of derivatives at Interactive Investor.

Weaker energy <.FTNMX0530> stocks were the main drag on the blue chip index as crude oil extended the previous session's declines, made after France said it was in talks with the United States and Britain on a possible release of strategic oil stocks to force down oil prices.

Banks <.FTNMX8350> were also big fallers, extending a recent reversal after a good run, with part state-owned lender Lloyds Banking Group the worst off, down 2.4 percent.

The Co-Operative Group has raised doubts about its bid to buy 632 retail bank branches from Lloyds, as regulators put the proposed deal under intense scrutiny.

Fashion retailer Marks & Spencer was the biggest individual FTSE 100 faller, shedding 3.0 percent, while peer Next fell 1.5 percent after Sweden's Hennes & Mauritz - a stalwart of the British high street - posted a much smaller-than-expected rise in first-quarter pretax earnings, blaming higher costs and discounts.


Among the minority of blue chip gainers, defensively-perceived stocks stood out as investors' risk appetite faded, with some corporate news also providing support.

International Power jumped 4.8 percent as majority shareholder GDF Suez of France finally made an indicative 390 pence a share cash bid to mop-up the outstanding 30 percent of the British firm it does not already own.

Imperial Tobacco gained 1.8 percent as the world's fourth-biggest cigarette group said it saw strong sales and profit growth in the first three months of 2012 as conditions in Spain, Ukraine and the United States improved, with half-year sales up 3 percent.

U.S. stock index futures pointed to a modestly higher open on Wall Street on Thursday, with equities recovering after a drop on Wednesday when sentiment was hit by more disappointing data, raising further doubts about the outlook for the world's biggest economy.

Investors will look to another batch of U.S. pointers to provide direction with the latest weekly jobless claims due at 12:30 p.m., together with the final estimate for Q4 GDP.

Economists in a Reuters survey expect U.S. fourth-quarter annualised growth to be unchanged from previous estimates of 3.0 percent.

Analysts will be dissecting the GDP data and looking for signs that personal consumption has been better than previously recorded. However, if it turns out that a build in inventories has bolstered GDP, there will be worries that this could weigh on growth numbers through the next couple of quarters, said David Morrison, Senior Market Strategist at GFT Markets.

(Editing by Mark Potter)