* Britain's FTSE falls under 5,000, down 2.6 pct
* Banks hit by growth, short-term funding worries
* Autonomy soars after HP bid
By Joanne Frearson
LONDON, Aug 19 (Reuters) - Britain's top shares plunged again on Friday, with the FTSE 100 dipping below the psychological 5,000 level on fears a global slowdown would tip major economies into recession.
Banks were among the worst hit on global growth worries and concerns about short-term funding stress, with Lloyds Banking Group dropping 7.7 percent to become the worst performer on the FTSE 100 .
Barclays and Royal Bank of Scotland fell 5.9 percent and 6.2 percent, respectively.
Investor nervousness intensified after some European banks were forced to pay higher rates for U.S. dollar loans on Thursday.
Barclays and Royal Bank of Scotland paid slightly above the 0.29778 percent LIBOR rate to borrow three-month money.
"If growth slows globally it could require further impairments on the balance sheets of British Banks," said Colin McLean, managing director at SVM Asset Management in Edinburgh.
"We do not see it ending until banks get more clarity on their balance sheets. We are underweight the sector."
By 0757 GMT, the UK benchmark index had fallen 134.62 points, or 2.6 percent, to 4,958.79, having already made its biggest percentage drop since March 2009 in the previous session.
The index is on track to make a weekly loss of 6.3 percent and has dropped 18.5 percent since the July to August sell-off began.
Trading in London is expected to be volatile ahead of the expiration of futures and options contracts at around 0915 GMT.
Autonomy went into orbit above a sinking FTSE with a 77 percent jump to a 10-year high in volumes 10 times its 90-day daily average after Hewlett Packard (HP) said it would buy the enterprise search software specialist.
COMMODITIES UNDER PRESSURE
Commodity stocks, whose performance is correlated to economic growth, were also among the worst performers.
Oil stocks were the hardest hit as Brent crude
Oil service provider John Wood Group was hit by a double whammy after JP Morgan cut it to "neutral" from "overweight" and fell 5.9 percent to feature among the FTSE 100's biggest losers.
"We are concerned that premium valuations will be at risk due to (i) a lull in major awards in H2, (ii) a relative slowdown in project completions in 2012, and (iii) the relatively high oil price dependence of subsea projects," JP Morgan said in a note. (Reporting by Joanne Frearson; Editing by Will Waterman)
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