FTSE down as data, banks weigh; BHP in late rally

By Michael Taylor

LONDON, April 8 (Reuters) - Britain's leading shares dipped on Tuesday after housing data and persistent credit worries dragged on banks, but BHP Billiton (BLT.L: Quote, Profile, Research) staged a late surge on market talk that China's Baosteel was planning to build a stake.

The FTSE 100 ended down 24.6 points or 0.4 percent at 5,990.2 after touching a five-week closing high in the previous session.

On the economic front, British house prices fell in March at their sharpest pace since the recession of the early 1990s, according to Halifax, the country's largest mortgage lender, raising expectations for a cut in interest rates this week.

The negative sentiment deepened towards the end of the session, when the International Monetary Fund said turmoil in credit markets could spread, meaning further losses for U.S. banks, and cautioned that risks to global economic growth had increased.

UK banks led the losers, also weighed down by comments from the chief executive of French bank BNP Paribas (BNPP.PA: Quote, Profile, Research), who said worsening market volatility would make it difficult to meet a promise of matching last year's investment banking revenues.

Barclays (BARC.L: Quote, Profile, Research), Royal Bank of Scotland (RBS.L: Quote, Profile, Research), HBOS (HBOS.L: Quote, Profile, Research), Lloyds TSB (LLOY.L: Quote, Profile, Research) and Standard Chartered (STAN.L: Quote, Profile, Research) were down between 0.4 and 1.9 percent.

"It's like a dripping tap at the moment," said Les Ames, a trader at WH Ireland of the economic newsflow.

He said that the market impact of the news was not as bad as in recent weeks.