* FTSE down; global markets drop on fear of slow recovery
* Japan's GDP figures disappoint some investors
* Miners and oils fall as commodities hit
By David Brett
LONDON, Aug 17 (Reuters) - Britain's top share index fell 1.5 percent by the close on Monday with heavyweight mining, oil and banking stocks leading the losers, as global markets retracted amid concerns over the pace of global recovery.
The FTSE 100 closed 68.96 points lower at 4,645.01, extending losses from Friday when the index shed 0.9 percent and marking its biggest one day percentage loss since July 2.
"The markets have been overdue a correction. They have run away with themselves, ignoring the basis of what was really going on," said Howard Wheeldon, strategist and BGC Partners.
"Recessions do not end in a day, a week or a few weeks, they take years and the process hasn't run its full course yet."
U.S. stocks followed the trend set by their European and Asian peers earlier in the day, trading lower after weaker-than-expected Japan GDP figures came on the back of unexpectedly weak U.S. consumer confidence data on Friday.
Miners fell as traders banked profits on the sector which has been at the forefront of the index's recovery, as falling metals prices, due by worries over economic recovery, added to the sector's woes.
Kazakhmys, Antofagasta and Lonmin were down between 3.7 percent and 4.2 percent.
The China Iron and Steel Association (CISA) said it would negotiate with the three top iron ore miners using a price it agreed with Australian miner Fortescue Metals Group as a reference.
However, Australia's largest miner Rio Tinto, which is due to report its half-year figures on Thursday, said it does not see a price pact between Fortescue Metals and China's largest steelmaker Baosteel as establishing an industry-wide price. Rio was down 4.7 percent.
Anglo American and Xstrata were the top blue chip fallers, down 5.6 and 5.5 percent respectively, after Xstrata was reported to have redoubled its attempt to win over the investors of its rival and merger-target Anglo American, the Guardian newspaper said on Monday.
Fresnillo shed 0.3 percent after the world's largest primary silver producer posted a 14 percent decline in first-half profit due to lower silver prices, but remained positive for the full year.
Banks were also lower as investors cut back on risky positions. HSBC, Lloyds Banking Group, Barclays and Standard Chartered were down between 1.9 and 4.5 percent.
Royal Bank of Scotland shed 2.7 percent after the lender said Britain's financial regulator has launched a supervisory review of the Scottish bank's takeover of ABN Amro.
Oils dropped as crude headed south toward $65 a barrel, with Cairn Energy, BG Group, BP and Royal Dutch Shell down between 0.5 and 3.6 percent.
PHARMAS PROVIDE SANCTUARY
There were few risers on the index but perceived defensive pharmaceutical stocks Shire, up 2.2 percent, and GlaxoSmithKline , up 0.8 percent, attracted investors shying away from riskier issues.
Life insurers Aviva and Legal and General added 1.6 and 2 percent respectively, with the former benefitting after HSBC upgraded the insurer to "neutral" from "underweight" and raised its price target.
Later in the day, the United States NAHB housing market index data for August will be released, with economists expecting a reading of 18, up from 17 in July.
More economic data comes on Tuesday in the form of the latest set of retail sales and CPI data in the UK and the U.S. Price Producers index possibly providing further direction.
"The way the market has behaved today tells me that this is not a flash in the pan. No matter what happens tomorrow we will continue heading down," said Wheeldon. (Editing by Rupert Winchester)