FTSE Down 1.2 Pct; Mines, Oils Weak; Tesco Pleases

By 0857 GMT, the FTSE 100 index was 53.89 points lower at 4,372.30, falling for a fifth straight session.

Britain's top share index fell 1.2 percent in early trade on Tuesday with miners weak after big losses from U.S. aluminium producer Alcoa and on demand concerns, while gloomy UK economic surveys also weighed.

By 0857 GMT, the FTSE 100 index was 53.89 points lower at 4,372.30, falling for a fifth straight session, having closed 22.35 points or 0.5 percent lower on Monday, with all the gains made at the start of the year now erased.

Miners headed the blue chip fallers list after Alcoa posted a bigger than forecast fourth-quarter loss as the global economic crisis sent revenue plummeting on lower demand and declining metal prices.

Rio Tinto was the top FTSE 100 lower, down 5.7 percent, while Xstrata, Vedanta Resources, Antofagasta, and Kazakhmys lost between 3.5 and 4.4 percent.

"The big sectors are down today. Miners after poor results from Alcoa from the U.S. overnight seem to be weighing actually it's more broader though," said Rob Griffiths, strategist at Cazenove.

"It's the growth outlook globally it's deteriorating and it continues to deteriorate. I think that is why those sectors are struggling at the moment," Griffiths added.

Banks fell back as a recent rally was curtailed by weakness from U.S. peers overnight amid quarterly earnings worries.

Royal Bank of Scotland, a big gainer on Monday, shed 4.55 percent. RBS has a total exposure to bankrupt U.S. chemicals group LyondellBasell of $3.5 billion according to a report in The Independent newspaper.

Lloyds TSB, HBOS, Barclays and HSBC fell between 0.3 and 3.4 percent.

Gloom on the British economy added to the negative backdrop as three surveys released on Tuesday highlighted the tough environment that companies are facing.

A survey by the British Retail consortium showed retail sales fell in December at their fastest monthly pace since records began 14 years ago.

Data from the Royal Institute of Chartered surveyors showed the pace of decline in British house prices eased slightly in December but sales hit a record low and the proportion of unsold houses rose to its highest level since 1992.

And completing the trio of depressing data, a British Chamber of Commerce survey said almost 6,000 firms showed a "frightening deterioration" towards the end of last year as confidence deteriorated at the fastest pace since the series began in 1989.

(For a roundup of this data, please click on)

Oil majors were weak as the crude price continued to fall on nagging demand worries, with Royal Dutch Shell, BP, Cairn Energy , and BG Group down between 0.1 and 2.1 percent.

But oil explorer Tullow Oil bucked the trend, adding 1.1 percent on news of another major oil find.

Tullow said it has made a major discovery at the Giraffe-1 well in Uganda, with commercialisation and first oil options to be fast tracked.

Food retailer Tesco gained 2.4 percent after a robust Christmas trading update.

Britain's biggest retailer met forecasts with a 2.5 percent rise in underlying UK sales over Christmas and said it is taking market share in non-food lines like clothing and electricals.

Peer Sainsbury, which pleased with its Christmas trading update last week, added 1 percent, but William Morrison, which is yet to release trading news, lost 0.3 percent.

Investors will look to UK November trade balance data, due at 0930 GMT for further clues on the health of the UK economy.