FTSE down as miners and M&S fall

By Dominic Lau

LONDON (Reuters) - The top share index shed 1 percent on Wednesday, extending the previous session's sharp losses as miners fell on weaker coal prices and Marks & Spencer (MKS.L) slumped after a profit warning, though drugmakers rose.

The FTSE 100 .FTSE closed down 53.6 points at 5,426.3 to touch a three-month low in a volatile session after trading as much as 1.6 percent higher. On Tuesday, the benchmark index lost 2.6 percent.

"It's good to see pharmaceuticals are finally doing what they should be and that's offering a bit of defensive solace. But other than that I am not particularly optimistic about the short-term position," said Tim Whitehead, head of portfolio services at Redmayne-Bentley.

"From what we read with the problem besetting the housing market, the inability to finance mortgages, consumer spending is clearly being impacted ... Things may deteriorate before they improve."

Slumping coal prices hit heavyweight miners, with BHP Billiton BTL.L, Xstrata (XTA.L), Vedanta Resources (VED.L), Antofagasta (ANTO.L), Anglo American (AAL.L), Eurasian Natural Resources (ENRC.L) and Rio Tinto (RIO.L) all down sharply.

AstraZeneca (AZN.L), however, topped the FTSE 100 gainers, up 4.8 percent after the group won a key U.S. patent battle over its second-biggest selling drug, Seroquel, for schizophrenia and bipolar disorder.

The sector also gained on hopes that its defensive qualities would come to the fore as shares of retailers and housebuilders wilted. GlaxoSmithKline (GSK.L) advanced 3.9 percent.

Dresdner Kleinwort said large-cap pharmaceutical stocks offered relative outperformance, since they had a degree of earnings protection, adding that there could be upgrades over the second-quarter results season.