(Corrects dateline to Aug 19 from Aug 18)
* Banks shed Tuesday's gains
* Miners, oils fall as commodity prices slide
* BoE minutes expected at 0830 GMT
By David Brett
LONDON, Aug 19 (Reuters) - Britain's top share index was down 1 percent early on Wednesday, as sentiment again turned to risk aversion following the previous session's rally, with heavyweight banks, miners and oils dragging the index lower
By 0817 GMT, the FTSE 100 index was down 46.04 points at 4,639.74, after closing 40.77 points higher on Tuesday. The blue chip index has rebounded 35 percent since hitting its year lows in March.
The FTSE retracted as traders turned bearish again questioning the speed of economic recovery and the justification for the recent the bull market run.
"The corporate earnings (and economic numbers) we've had do not justify the extreme rally. Just because the expectations were so bad didn't make the numbers good," said Simon Denham, managing director at Capital Spreads.
"Other asset values - bonds, oil, gold, are looking a bit toppy. If we go below 4,590-odd we're back in the old trading range and (that) would not bode well for the run-up to Christmas," Denham added.
Banks took the most points off the index, as the appetite for risk again reversed.
HSBC, buoyed on Tuesday by a Goldman Sachs upgrade, Standard Chartered, Lloyds Banking Group, Royal Bank of Scotland and Barclays all lost 0.7 to 2.6 percent.
The sector was not helped by a survey from accountants KPMG, which found Britain's banks are likely to see their battered retail arms slide to a loss in the second half of 2009, as the cost of bad loans, tough competition and wholesale funding continues to weigh.
Weak commodity issues also weighed on blue chips as raw material prices fell, impacted by doubts over the pace and extent of economic recovery.
Miners shed some of Tuesday's gains, with Xstrata, Kazakhmys , Antofagasta, BHP Billiton and Lonmin down between 0.6 and 2.6 percent.
Anglo American shed 1.8 percent. Two major shareholders in the firm have backed new chairman John Parker's bid to buy time and stave off rival Xstrata's nil-premium merger proposal, which one said on Tuesday was effectively dead.
Eurasian Natural Resources Corporation, however, provided some respite for the sector. Its shares rose 5.5 percent after the Kazakh-focused miner posted a fall in first half earnings that was smaller than expected.
Oil majors fell as crude prices retreated back below the overnight price of $70 a barrel. Royal Dutch Shell, BG Group, BP , Cairn Energy and Tullow Oil lost 0.2 to 0.9 percent.
Ex-dividends knocked 9.65 points off the FTSE index, with British American Tobacco, Hammerson, HSBC, Pearson, Prudential, SABMiller, Scottish & Southern Energy and Thomson Reuters all losing their payout attractions on Wednesday.
BoE MINUTES AWAITED
With little in the way of meaningful economic data, the macro focus was on the Bank of England (BoE) meeting minutes, due at 0830 GMT, with the market keen to see how the members voted when the central bank increased its asset-buying total by a much bigger than expected 50 billion pounds.
Analysts are mostly forecasting the Monetary Policy Committee (MPC) was unanimous in its decision to raise the quantitative easing total, but given the uncertainty surrounding the prospects for recovery, there is a risk of a split vote for the first time since the asset buying began..
Of the few other minority blue chips gainers, Serco climbed 0.4 percent as Evolution Securities initiated coverage of the outsourcing group with a "buy" rating and 500 pence target..
Retailers Marks and Spencer, Tesco and Wm Morrison Supermarkets gained between 0.1 and 0.4 percent. (Editing by Hans Peters)