FTSE down 0.2 pct, pressured by miners
* Miners weigh, hurt by lower metals prices
* Defensives in favour; tobacco sector best performer
By Tricia Wright
LONDON, Feb 19 (Reuters) - Britain's top share index fell 0.2 percent by midday on Friday, weighed down by miners that fell on lower metals prices and offset gains in defensive stocks such as tobacco. By 1219 GMT, the FTSE 100 .FTSE was down 10.04 points at 5,315.05, after ending 0.9 percent higher on Thursday at its highest closing level since Jan. 21.
The market settled back after being volatile early on Friday as the latest monthly futures and options expiry took place in London between 1000 GMT and 1015 GMT.
Miners were the worst blue-chip performers, reversing the previous session's solid gains, as metals prices came under pressure from a stronger U.S. dollar after the Federal Reserve made its first monetary policy move since December 2008. [ID:nSGE61I036]
Fresnillo (FRES.L), Randgold Resources (RRS.L) and Antofagasta (ANTO.L) were among the top fallers, shedding 1.6 to 3.2 percent.
Anglo American (AAL.L) dropped 2.8 percent. The company declined to reinstate a dividend on Friday after posting a 51 percent fall in annual earnings per share on the back of falling metal prices. [ID:nLDE61H1AM]
U.S. stock index futures SPc1 pointed to a weaker start for Wall Street on Friday after the U.S. Federal Reserve raised the discount rate, an emergency lending rate it charges banks.
Attention was also on the latest U.S. inflation numbers at 1330 GMT, with January core CPI seen up 0.3 percent, after a 0.1 percent rise in December.
UK data released on Friday showed British retail sales fell at their sharpest pace in 1-1/2 years in January as cold weather sent household goods sales tumbling at the fastest pace in more than two decades. [ID:nLDE61I0RX]
"It was quite surprising yesterday that markets were actually as good as they were. I think the UK public sector financing was pretty bad yesterday and I think that there's a degree of that creeping into today," said Howard Wheeldon, strategist at BGC Partners.
Britain recorded a budget deficit last month, the first January deficit on record, after government spending shot up and tax receipts dived. [ID:nLDE61H12W]
Banks were mixed. Barclays (BARC.L), which posted forecast-beating results at the start of the week, put on 0.3 percent, while Royal Bank of Scotland (RBS.L), due to report results next week, rose 0.6 percent.
But Lloyds Banking Group (LLOY.L), also scheduled to report results next week, fell 1.1 percent, while HSBC (HSBA.L) and Standard Chartered (STAN.L) slipped 0.1 and 0.4 percent.
RBS's revised long-term reward plan for top executives will be fully agreed with shareholders before it is put to the market, a top investor said, a move designed to avoid any investor revolt on the issue. [ID:nLDE61H2H4]
DEFENSIVES LIMIT LOSSES
Defensive stocks were in favour as investors' risk appetite dwindled.
British American Tobacco (BATS.L) was the top FTSE 100 riser, up 2.1 percent, bolstered by a target price hike from Nomura, while peer Imperial Tobacco (IMT.L), downgrade by Nomura earlier this week, rose 1.4 percent.
Consumer goods giant Unilever (ULVR.L) added 1.6 percent after Swiss peer Nestle (NESN.VX) beat forecasts for 2009.
On the second line, Rentokil Initial (RTO.L) put on 7.2 percent after the pest control to parcel delivery firm reported sharply higher profit, helped by cost cuts. [ID:nLDE61I08X]
"I think the FTSE will trade more or less sideways for the near term," said Peter Dixon, economist at Commerzbank.
"(This is) primarily because on valuation grounds I think there are good reasons for the market to go up, but on fear factor grounds we could see a bit of a sell-off -- balancing those forces together it's a fairly dull outlook."
(Editing by Erica Billingham)
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