Econ gloom hits energy, drags FTSE to 10-week low

* FTSE 100 down 0.7 percent

* Energy stocks weighed by falling oil prices

* Miners dented by softer metals

By Simon Falush

LONDON, July 10 (Reuters) - More gloom on prospects for the global economy sparked by weak U.S. corporate results depressed commodity prices, knocking energy stocks and dragging Britain's top share index to a 10-week low by midday on Friday.

By 1028 GMT the FTSE 100 <.FTSE> was down 24.00 points at 4,134.66 after it closed 18.43 points higher on Thursday at 4,158.66. The index is on track for its lowest close since late April, down 2.4 percent this week, set for its fourth consecutive week in negative territory.

Energy stocks took the most points off the index as oil prices slid below $60 per barrel, on track for its largest weekly fall since January as the demand outlook soured and on fears of new rules to curb futures speculation.

BP , Royal Dutch Shell , BG Group , Tullow Oil and Cairn Energy fell between 0.5 and 1.1 percent.

"The oil price has come off in the last few weeks and that has chilled the mood for commodities," said Lars Kreckel, equity strategist at Exane BNP Paribas.

A downbeat earnings outlook from U.S. oil major Chevron Corp also dented sentiment on the sector and the wider economy.

Kreckel said earnings from U.S. and European companies over the next few weeks would be critical for giving the market direction.

"In general I would expect them to meet or beat analyst expectations but it will be difficult to meet investor expectations," he said, adding that he expects defensive stocks and cyclical laggards to outperform.

Underlining the fragile state of the British economy, factory costs fell in June at their sharpest annual rate since 1997 and output prices dropped at their fastest in 7-1/2 years, in a sign inflation will fall sharply in the coming months. [ID:nLA422963]

MINERS HAMSTRUNG

Miners were hamstrung by weaker metal prices, with Kazakhmys , Eurasian Natural Resources , Anglo American , Lonmin and BHP Billiton falling between 0.2 and 2.1 percent.

Anglo American has appointed veteran industrialist John Parker as its new chairman on Friday replacing Mark Moody-Stuart who will retire after seven years at the helm. [ID:nLA342519] Parker will retain his post as chairman of British energy provider National Grid Plc .

Rio Tinto was the sharpest blue-chip faller, down 2.9 percent, dogged by the detention of four employees by Chinese authorities for leaking China's "bottom line" in iron ore price negotiations, according to a source with knowledge of the probe. [ID:nSP473911]

U.S. May international trade numbers and the first reading for July of the University of Michigan consumer sentiment index will be a focus later in the session.

But overall trade has been thin after a sharp bounce since early March has begun to reverse over the last month.

"Investors who made some money during the upturn in March, April and May are now reluctant to get back into the market and risk those gains," said Arifa Sheikh-Usmani.

"Volumes in equities have all but dried up which adds to investors reluctance to get back in to the market at the present time."

Retailers were broadly higher, with traders citing the low interest rate environment and positive broker commentary from the previous session as supportive.

Home Retail was the biggest riser, up 3.8 percent, while Kingfisher , Tesco , Next and Marks and Spencer added 1.2-2.2 percent.

Among other stocks in positive territory, publishing group Pearson added 1.8 percent after Credit Suisse upgraded it to "outperform" from "neutral" and property developer Liberty International gained 1.1 percent after UBS upgraded it to "neutral" from "sell". (Reporting by Simon Falush; Editing by Hans Peters)