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FTSE lower on last full day session of 2010

Published 12/30/2010, 04:02 AM
Updated 12/30/2010, 04:26 AM
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* FTSE 100 index down 0.1 percent, yo-yoing around 6,000

* Energy issues, defensives fall

* Miners gain as metal prices firm on weaker dollar

By Jon Hopkins

LONDON, Dec 30 (Reuters) - Britain's leading share index slipped back in early deals on Thursday, yo-yoing around the 6,000 level on the last full day's trading session of 2010, with weakness in energy issues countering gains by miners.

At 0853 GMT the FTSE 100 index was down 4.80 points or 0.1 percent at 5,991.56, having finished 0.2 percent lower on Wednesday.

The UK blue chip index closed at a 30-month high on Friday, ending above the 6,000 level for the first time since June 2008.

"The battle to end 2010 above the 6,000 level continues in very thin volumes with no news or data to help out and just sheer willpower the trader's only weapon," said Mic Mills, head of electronic trading at ETX Capital.

Trading volume was just 1.8 percent of the 90-day moving average.

Weakness in energy issues was the main drag on blue chip sentiment, with the sector falling back after recent gains as crude hovered above $91 a barrel. BP lost 0.6 percent, while Royal Dutch Shell fell 0.4 percent.

Defensively-perceived issues also fell back as investors' risk appetite returned at the year-end, with drinks group Diageo among the worst off, down 0.9 percent, while household products firm Unilever lost 0.6 percent.

TOP GAINER

Miners, however, moved higher as a weaker dollar helped to boost metal prices.

Mexican silver miner Fresnillo was the top FTSE 100 riser, up 1.3 percent as the price of the metal hit a 30-year peak.

Record copper prices also helped lift Rio Tinto and Antofagasta, up 0.3 and 0.4 percent respectively.

Banks saw some support, rallying after falls in the previous session as concerns over euro-zone debt exposure eased.

Barclays added 0.7 percent, while Royal Bank of Scotland and Lloyds Banking Group both gained 0.1 percent, but heavyweight HSBC lost 0.1 percent.

Among other financials, insurers rallied, with Aviva up 0.5 percent and Old Mutual ahead 0.6 percent.

Among second liners, SIG was a good gainer, up 2.4 percent, after the Financial Tines market report noted rumours that Canadian peer IKO Enterprises might be adding to its 5.3 percent stake in the British insulation specialist.

The FTSE 100 index is up 10.8 percent this year and has gained 25 percent since it touched its year's low at the start of July.

On the macro front, policymaker Andrew Sentance was quoted as saying that the Bank of England should raise interest rates sooner rather than later to contain inflation, reiterating his long-held view.

With an absence of any significant British data due for release on Thursday, investors will look across the Atlantic for pointers on the global economic outlook.

U.S. pending home sales and latest weekly jobless claims are among data scheduled for release on Thursday. (Editing by David Holmes)

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