RTRS: FTSE down 2.3 pct as commods fall, data adds gloom
Metals, oil prices dip
* Weak manufacturing, mortgage data deepens economic gloom
* Banks fall, pressured by sliding UK property market
By Simon Falush
LONDON, Dec 1 (Reuters) - Britain's leading share index fell 2.3 percent by midday on Monday as demand worries dented commodity prices, dragging down miners and energy stocks, while weak data highlighted problems facing the UK economy.
By 1119 GMT the FTSE 100 .FTSE was down 97.11 points to 4,190.90 after gaining 1.5 percent on Friday and 13.4 percent last week, its best ever weekly performance.
British mortgage approvals fell in October to match their lowest levels since the data series began a decade ago and mortgage lending was also much weaker than expected. [ID:nL1364000]
British manufacturing shrank at a record pace in November after a collapse in new orders, purchasing managers' data from Markit/CIPS showed on Monday. [ID:nL1349797]
"The gloomy economic data is continuing to cast a pall over markets, which is bad because it could be argued that one of the indicators that we're past the worst will be when markets no longer respond negatively to bad news," said Jeremy Batstone-Carr, head of private client research at Charles Stanley. "Yet they are continuing to do so."
Energy stocks fell as oil prices CLc1 slid more than $2 to $52 per barrel after producer cartel OPEC decided to delay a decision on a third supply cut until its next meeting in December as economic woes squeeze oil demand.
Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) slipped 1.4 percent, BP (BP.L: Quote, Profile, Research, Stock Buzz) fell 1.6 percent and Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) slid 2.8 percent.
MINERS DROP
Fears of slowing demand also hit mining stocks.
Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) slid 6.2 percent after it suspended more ferrochrome production due to weak market conditions, while Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) fell 3.1 percent, and Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz) lost 3.3 percent.
Banks were under pressure as fears of the health of the sickly UK housing market added further pressure to the beleaguered sector.
House prices in England and Wales fell by 1.1 percent in November to take them 8.1 percent lower on a year ago, property consultancy Hometrack said in its monthly survey.
Meanwhile, the outlook for British manufacturers has deteriorated significantly over the last quarter, a survey carried out by the Engineering Employers Federation showed on Monday, warning conditions in 2009 are set to be some of the toughest for two decades.
Further, heavy discounting by Britain's retailers has failed to boost shopper numbers and the rate of business failures in the industry is accelerating, surveys by researchers Experian showed.
Kingfisher KGFL.L, Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) and Next (NXT.L: Quote, Profile, Research, Stock Buzz) fell between 4.7 and 6.1 percent.
The deteriorating economic environment has put pressure on global central banks to ease monetary policy.
Investors will eye interest rate decisions this week from both the Bank of England and the European Central Bank, with both expected to deliver further easing in monetary policy on Thursday. (Additional reporting by Nicholas Vincour; Editing by David Cowell)
