FTSE slides as demand worries knock commodities

* FTSE 100 down 1.8 percent

* Energy, miners hit hard by falling commodity prices

* Financials pressured as crisis continues to weigh

* Retailers gain ahead of sales data

(For more on the financial crisis, click on [nCRISIS])

By Simon Falush

LONDON, Nov 20 (Reuters) - Britain's top share index fell 1.8 percent early on Thursday as a raft of weak data led to a rout in Asian and U.S. stocks, undermining already shaky confidence, with commodity stocks hit by a slide in raw material prices.

By 0900 GMT the FTSE 100 .FTSE had fallen 68.94 points to 3,938.17, after falling 4.8 percent on Wednesday.

In the U.S., the Federal Reserve slashed its growth forecasts and consumer prices fell at a record pace last month while Japan's October exports fell at their fastest pace in seven years.

The gloomy news heightened fears that demand for energy and commodities would slump, sending crude CLc1 down for a fifth consecutive session to below $53 and hammering already dented metals, battering heavyweight oil and mining stocks.

BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell, (RDSa.L: Quote, Profile, Research, Stock Buzz) and Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) fell between 0.4 and 6.1 percent while miners Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz) Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) and Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) lost between 0.8 and 1.8 percent.

"We have contracting economic growth, falling corporate profits, and increasing unemployment which is filtering through to every part of the economy," said Henk Potts, investment manager at Barclays Stockbrokers.

"This is a very difficult environment for cyclical stocks, and its putting a lot of pressure on financial, mining and energy stocks."

Highlighting the strong headwinds that the UK economy is facing and the fact that unemployment is set to rise rapidly, Rolls Royce RRL.L slipped 2.9 percent after it said it will cut about 4 percent of its workforce next year. [ID:nLK223203]

Banks were mixed, with Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) up 2.8 percent, recovering some of the hefty losses from the previous session, and HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) up 0.2 percent.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) fell 6.4 percent, with shareholder discontent over the bank's controversial fundraising plan continuing to dent the stock, while Lloyds TSB slid 1.7 percent.

UK data at 0930 GMT will give more guidance on the extent to which the economy has slid into recession.

Next (NXT.L: Quote, Profile, Research, Stock Buzz), Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) and Kingfisher (KGF.L: Quote, Profile, Research, Stock Buzz) gained 2 to 4.1 percent ahead of UK retail sales data for October. This is expected to show a 0.9 percent contraction, while public sector debt data will also be watched.

Other financial stocks were also heavy losers with falling equity prices contributing to an 8.8 percent fall for Schroders (SDR.L: Quote, Profile, Research, Stock Buzz). Prudential (PRU.L: Quote, Profile, Research, Stock Buzz) slid 8.5 percent while Legal & General (LGEN.L: Quote, Profile, Research, Stock Buzz) fell 4.9 percent.

(Reporting by Simon Falush; editing by John Stonestreet)