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FTSE flat as investors wait on U.S. jobs data

Published 12/03/2010, 06:57 AM
Updated 12/03/2010, 07:00 AM
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* FTSE 100 flat, investors eye U.S. non-farm payrolls

* Man Group weighed by Numis downgrade

* Precious metals miners gain as gold firms

By David Brett

LONDON, Dec 3 (Reuters) - Britain's top shares were almost flat approaching midday on Friday, a fall among financials after recent gains offsetting strength in precious metals miners ahead of jobs data from the United States.

By 1132 GMT, the FTSE 100 was down 1.21 points at 5,766.35.

The index gained a hefty 125.06 points on Thursday, a second straight session of strong gains and its highest close since Nov. 22, as optimism grew about the global economy and that the euro zone debt crisis would be contained.

"If there is a concern at this stage it is that participation in the rally is still somewhat muted," analysts at Charles Stanley said.

"Nevertheless, the fact remains the FTSE has bounced sharply following a temporary breach of support and it is not clear that this move is over yet."

Banks dropped some of the previous session's strong gains, with Standard Chartered off 2 percent.

The European Central Bank said it was continuing to buy euro zone government bonds to counter a destabilising rise in peripheral countries' borrowing costs, although there was no sign of the "shock and awe" scale of purchases some analysts said is required.

Man Group fell 3.4 percent after Numis Securities cut its rating for the hedge fund firm to "reduce" from "hold" in an otherwise fairly neutral review of British asset managers.

U.S. JOBS

Investors' attention will focus on U.S. jobs numbers this afternoon, with November non-farm payrolls due at 1330 GMT,

"Traders do not want to get caught on the wrong side of any potential upside ahead of key economic data," Jimmy Yates, head of equities at CMC Markets, said.

Wall Street futures pointed to a weaker start for equities on Friday, with U.S. ISM non-manufacturing index also due for release at 1500 GMT.

The rate of growth in the British service sector slipped slightly in November, as expected, but remained near October's four-month high.

Precious metals miners were among the top gainers on the FTSE, as gold rose back above $1,390 an ounce, close to its strongest in three weeks, ahead of U.S. jobs data that could point to a strengthening economic recovery.

Gold producer Fresnillo was up 3.3 percent, while Johnson Matthey added 2.1 percent with the platinum processor helped by an increase in target price and estimates from Liberum Capital, which kept a "buy" rating on the stock.

Temporary power supplier Aggreko rose 1.2 percent after it extended its power coverage in the U.S. with the purchase of Northland Power Services.

Kingfisher rose 1.6 percent, boosted by a flurry of bullish broker notes following the home improvement retailer's results on Thursday.

Perceived defensive stocks also provided support for the FTSE, with drugmaker GlaxoSmithKline up 0.4 percent and Imperial Tobacco rising 0.5 percent.

(Editing by David Hulmes)

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