* U.S. economy shrinks in Q4, biggest drop since '82
By Dominic Lau
LONDON, Jan 30 (Reuters) - Britain's leading share index fell on Friday to end the month lower, extending last year's dismal performance, as heavyweight commodity stocks slipped, though banks and property firms offered some support.
The FTSE 100 .FTSE closed down 40.47 points, or 1 percent, at 4,149.64, after losing 2.5 percent on Thursday. The UK benchmark index has fallen 6.4 percent this month after losing more than 31 percent last year, its worst annual drop since its launch in 1984.
"The banks have recovered a bit of their poise in the last few days. Immediate fears of nationalisation have subsided," said Tim Whitehead, head of portfolio services at Redmayne-Bentley.
"The index is likely to remain rangebound between 4,000 and 4,400 ... It's still a case of waiting to see what the big corporate earnings numbers come out with starting in the middle of February."
Weaker metal prices weighed on mining stocks, with BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz), Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz), and Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz) losing 2.8 to 11.8 percent.
The sector was also hurt by Xstrata's rights issue announcement on Thursday and market talk that BHP was guiding its earnings forecasts lower ahead of results next week. BHP declined to comment.
Oil producers were also losers, as BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) and Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) dropped between 0.9 and 3.9 percent.
Data from the U.S. showed its economy shrank at its fastest pace in nearly 27 years in the fourth quarter, sinking deeper into recession as consumers and business cut spending.
However, a survey showed U.S. consumer confidence rose to a four-month high in January but improved less than economists had expected and remained weak overall.
In the UK, consumer confidence fell to its second lowest level on record in January as people fretted about the deepening recession and grew increasingly worried about their own finances, a survey showed.
Banks offered some support on Friday after a heavy battering earlier this month. The sector .FTNMX8350 has lost 20 percent in January after losing nearly 57 percent in 2008.
Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) rose 5.8 percent, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) advanced 4.8 percent and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) added 3.7 percent.
Property stocks were also in demand after Morgan Stanley upgraded its outlook for several firms, saying it was switching its preference to the UK away from mainland Europe.
Land Securities (LAND.L: Quote, Profile, Research, Stock Buzz) topped the FTSE 100 gainers, up 8.8 percent, while Liberty International (LII.L: Quote, Profile, Research, Stock Buzz) and Hammerson (HMSO.L: Quote, Profile, Research, Stock Buzz) put on 3.8 and 4.5 percent, respectively.
UBS said in a note that it estimated 36 percent of the trading statements published by companies this month had been better than expected.
"Earnings momentum is now beginning to move up from its lows," it said, adding that the downgrading of expectations seen towards the end of last year from analysts had perhaps been sufficient, and even too much. (Editing by Will Waterman)
