UK's top share index slides

Britain's top share index slid on Thursday, with banks on both sides of the Atlantic hit by fears of more losses, while weak US housing data fuelled concerns for a US economy flirting with recession. The Bank of England kept interest rates on hold at 5.25 percent earlier on Thursday, as expected.
But is widely expected to cut them by the middle of the year to aid an economy buffeted by a global credit crunch. The European Central Bank held interest rates at 4 percent. The FTSE 100 ended a volatile trading session down 1.5 percent, or 87.1 points at 5,766.4 as shares slid across Europe.
The index has lost nearly 11 percent so far this year on fears of a US recession and further credit-related losses at financial institutions. Banks took a beating as US bond insurer Ambac's move to shore up its balance sheet proved a disappointment. US stocks fell, led down by financials after news of a default at a home lender and a report showing US mortgage foreclosures reached a record high.
FTSE 100 banks all fell and together took about 28 points off the index, with Barclays down 4.6 percent, Royal Bank of Scotland down 3.9 percent and Alliance & Leicester down 3.6 percent. "There's no reason why you'd want to look at financials for a long time," said Peter Dixon, an economist at Commerzbank.
Financial concerns also circled Switzerland's UBS. CNBC cited bond manager Pimco denying market talk that it had bought $24 billion of Alt-A investments from the Swiss bank. Pimco officials were not immediately to comment on the CNBC report, while UBS declined to comment.
"It's like a jigsaw, you've got all the little bits and they're all coming together to make a pretty poor picture," Dixon said of the combination of investor concerns on Thursday regarding Ambac, UBS, Lehman, and the housing data.
British Airways lost 7.6 percent to top the losers' list after it warned that airlines were entering a downward cycle due to global economic weakness and that rising fuel costs would put next year's margin target of 10 percent out of reach.
Drugmakers were weaker after Britain looked to strengthen the law on disclosing drug trial results following a four-year inquiry into GlaxoSmithKline's delay in reporting data linking its antidepressant Seroxat to suicide risk in teenagers. GlaxoSmithKline shares fell 1.9 percent.
Leading the upside, electricity firm International Power added 6.7 percent after it posted a rise in 2007 profit and said it expected further growth this year. Peers Scottish & Southern Energy and Centrica rose 1 and 1.3 percent, respectively.
Shares in nuclear power firm British Energy added 3.3 percent after Britain said it was making 18 more sites available for the next generation of nuclear power stations and gave operators four weeks to pick the ones they wanted.
Among midcaps, insurer Catlin added 6.2 percent after it posted a forecast-beating 4 percent rise in 2007 pretax profit, despite a subprime-related hit announced last year, and increased its estimate for synergies from the take-over of rival Wellington.