* Energy, mining stocks fall with oil, metals prices
* Retailers gain after sales data beats expectations
(For more on the financial crisis, click on [nCRISIS])
By Nick Vinocur
LONDON, Nov 20 (Reuters) - Britain's top share index was down 1.6 percent by midday on Thursday, as dire forecasts for the U.S. economy led to sharp falls in commodity prices, denting energy and mining companies.
By 1158 GMT the FTSE 100 .FTSE had fallen 62.41 points to 3,943.03, after falling 4.8 percent on Wednesday.
In the U.S., the Federal Reserve slashed its economic growth forecasts and consumer prices fell at a record pace last month, while Japan's October exports fell at their fastest pace in seven years.
The news heightened fears that demand for energy and commodities would slump, sending crude CLc1 down for a fifth consecutive session to below $53, as weaker metal prices put more pressure on miners.
BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell, (RDSa.L: Quote, Profile, Research, Stock Buzz) and Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) fell between 0.3 and 5.9 percent while miners Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz) Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) and Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) lost between 2.1 and 7.1 percent.
"We are having a downturn in the UK today after having got back to a sense of relative normality in earlier sessions. Weak data from the U.S. is the main catalyst," said CMC Markets analyst James Hughes.
"Commodity and oil prices are really hurting, and miners are so heavily weighted that it's pulling the index down. But we're seeing some better retail sales and that's going to help since they've been under so much pressure lately," he added.
UK retailers saw some relief after monthly data showed sales falling less than expected in October despite a decline in discretionary spending. [ID:nLK280751]
Europe's biggest home improvement firm Kingfisher (KGF.L: Quote, Profile, Research, Stock Buzz), clothes and food retailer Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) and fashion and homewares store group Next (NXT.L: Quote, Profile, Research, Stock Buzz) all rose between 2.1 and 4.3 percent after suffering in the previous session.
Banks were under pressure after a 23 percent drop in the share price of U.S. banking giant Citi jolted already anxious investors and sent shockwaves through global markets.
Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) fell 2.4 percent, with shareholder discontent over the bank's controversial fundraising plan continuing to dent the stock. HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) fell 1.5 percent, adding to hefty losses the previous session.
Life insurers were down sharply, tracking falls in their U.S. counterparts the previous session with analysts pointing to continued selling by mutual funds.
Aviva (AV.L: Quote, Profile, Research, Stock Buzz) was the index's heaviest loser, sliding 14.3 percent, while Prudential (PRU.L: Quote, Profile, Research, Stock Buzz) lost 9.8 percent and Legal & General (LGEN.L: Quote, Profile, Research, Stock Buzz) lost 9 percent.
Other financial stocks were also heavy losers with falling equity prices contributing to an 5.8 percent fall for Schroders (SDR.L: Quote, Profile, Research, Stock Buzz).
Still, the prospect of government bailout money lifted some banking stocks.
Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) jumped 11.6 percent ahead of a shareholder vote on its plan to raise capital from the UK government while Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) gained 8.5 percent, its shareholders having approved on Wednesday a similar plan and its proposed takeover of HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz). (Editing by Greg Mahlich)
