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Miners, banks push FTSE down, defensives support

Published 12/03/2010, 04:12 AM
Updated 12/03/2010, 04:24 AM
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* FTSE down 0.1 percent

* Miners, banks clip recent gains

* Aggreko rises as it expands U.S. presence

By David Brett

LONDON, Dec 3 (Reuters) - Britain's top shares edged lower early on Friday as miners and financials clipped some of their strong gains made in the previous session, while defensive stocks helped stem losses.

By 0858 GMT, the FTSE 100 was down 5.03 points, or 0.1 percent at 5,762.53.

The index soared up 125.06 points, or 2.2 percent 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.

"Investors are taking profits this morning, although falls are only marginal," Jimmy Yates, head of equities at CMC Markets, said.

"Traders do not want to get on the wrong side of any potential upside ahead of key economic data in Europe and the U.S.."

The Markit/CIPS British services PMI report for November will be released at 0928 GMT.

But Investor attention will focus on U.S. jobs numbers this afternoon, with November nonfarm payrolls due at 1330 GMT,

The U.S. ISM non-manufacturing index will be released at 1500 GMT.

On the FTSE, miners led the fallers as investors booked profits, with Xstrata down 1.0 percent.

Banks were lower with Standard Chartered off 1.6 percent, while insurer Old Mutual and hedge fund firm Man Group shed 1.9 and 2.2 percent respectively.

There was talk that the European Central Bank of was buying bonds of peripheral countries such as Ireland and Portugal even though no new ECB policy was formally announced after its council meeting on Thursday, .

Elsewhere, Rolls-Royce fell 1.4 percent as Qantas Airways said it is claiming damages from the engine maker over faulty Airbus A380 engines and loss of business and investigators concluded a design fault was the likely cause of a mid-air engine failure on an Airbus A380 last month.

AGGREKO POWERS HIGHER

Temporary power supplier Aggreko rose 1.8 percent after it extended its power coverage in the U.S. with the purchase of Northland Power Services.

Fashion retailer Burberry, which was a strong performer on Thursday after upbeat retail data in the U.S., rose 1.5 percent as Seymour Pierce began coverage of the firm with a "buy" rating.

Perceived defensive stocks also provided support for the FTSE, with drugmaker GlaxoSmithKline up 0.1 percent and Imperial Tobacco rising 1.1 percent.

InterContinental Hotels Plc, the world's biggest hotelier, climbed 1.2 percent as Goldman Sachs raised its rating to "buy" from "neutral".

James A. Hyerczyk, analyst at Autochartist, said the key to sustaining the index's recent rally "will be the ability to create support at 5,756 to 5,710. If this area fails to hold as support, then this market is likely to correct back to 5,655". (Editing by Hans Peters)

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