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Glance-FTSE tumbles on Irish debt woes and China hike fear

By David Brett LONDON, Nov 12 (Reuters) - Britain's top share index fell sharply on Friday as Ireland's debt troubles and concerns over China's overheating economy weighed on investor sentiment, with financials and commodity-linked stocks leading the fallers. By 0858 GMT, the FTSE 100 was down 57.81 points, or 1.0 percent at 5,757.42, extending falls into a third session after losses overnight on Wall Street and across Asia. Financials were among the hardest hit as investors fretted over potential exposure to Europe's debt problems, with Barclays down 1.5 percent. Royal Bank of Scotland, however, rebounded 1.6 percent, after falling 2.7 percent on Thursday on concerns over its exposure to Ireland. BofA Merrill Lynch said the sell-off was overdone and was an opportunity to buy into the stock. At the G20 summit in Seoul, European Union leaders sought to reassure investors unnerved by Ireland's fiscal problems they would not be forced to take a writedown. Ireland's prime minister said recent French and German comments had aggravated the problem. "The conclusion of the G20 was more work in progress and now that is out the way the market is looking for focus," Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London said. "Markets have been technically over-bought for some time and are vulnerable to profit taking. It could result in a couple of hundred points coming off the FTSE." Mid-cap company Tullett Prebon dropped 3.9 percent, down for the second day in a row after the interdealer broker reported a drop in quarterly revenue. COMMODS RETREAT Mining and energy stocks fell sharply along with commodities as investors focused on spiralling inflation in China and steps the government might take to cool an overheating economy. On Thursday, China said its inflation hit a 25-month high in October and bank lending blew past expectations, leaving little doubt about why the central bank raised reserve requirements this week and pointed to further tightening. "The figures yesterday on Chinese inflation took a bit of time to gel, but our view is that the authorities are really going to have to accelerate the tightening," Lenhoff said. Global miner Xstrata was the top FTSE faller down 4.2 percent, while oil major BG Group shed 1.7 percent. On the upside, Rolls-Royce was the top FTSE 100 riser, up 2.2 percent, after an update said the A380 engine failure was confined to one component in the company's Trent 900's turbine. Investec said the "clarity is a positive". Rolls-Royce shares had fallen as much as 10.8 percent since Nov. 3 when Qantas Airways suspended flights of its Airbus A380 planes after the failure of a Trent 900 caused one of its flight to make an emergency landing. The enginemaker said it now expected underlying profit growth for the full year to be slightly lower than previously guided because of costs associated with the blowout. (Editing by Dan Lalor; Editing by Dan Lalor) Keywords: MARKETS BRITAIN STOCKS * For related prices, Reuters Terminal users may click on - * UK stock report FTSE index: techMARK 100 index: FTSE futures: Gilt futures: Smallcap index: FTSE 250 index: FTSE 350 index: Market digest: Top 10 by vol: Top price gainers: Top % gainers: Top price losers: Top % losers: * For related news, click on - * UK hot stocks: Wall Street: Gilts report: Euro bond report Pan European stock report: Tokyo stocks: HK stocks: Sterling report: Dollar report: * For company prices, click on - * Company directory: By sector: * For market commentary, click on * For pan-European market data and news, click on - * Daily European stocks report........................ European Equities speed guide................ FTSE Eurofirst 300 index......................... DJ STOXX index................................... Top 10 STOXX sectors........................ Top 10 EUROSTOXX sectors................... Top 10 Eurofirst 300 sectors................ Top 25 European pct gainers.................... Top 25 European pct losers..................... Keywords: MARKETS BRITAIN STOCKS =2 (david.brett@thomsonreuters.com. +44 20 7542 8099) Reuters Messaging: david.brett.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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