UK's top share index dips

Britain's top share index closed lower on Friday, led down by banks and miners, with investor sentiment dampened by disappointing US employment data. The FTSE 100 index ended down 35.18 points, or 0.6 percent, at 5,984.33, though it notched a 1.4 percent gain in the course of the first, shortened trading week of 2011, having advanced 6.7 percent in December.
The US economy created 103,000 jobs in December, the Labour Department said - below a forecast of 175,000 - which analysts said could hamper the FTSE's near-term progress. Michael Hewson, market analyst at CMC Markets, envisaged the UK blue chip index slipping back towards 5,900 as a result.
"We could see a pullback for equities in the short term. What I don't think we'll see is equities tumbling," he said. "I just think it makes the Fed's QE (quantitative easing) programme more than likely to go the full course, and that should underpin equity markets as such, but it could make progress higher a little bit more long-winded." The US jobs data is "not massively negative but I think if it had been better than expected, we'd have had an excuse to go even higher next week," David Jones, chief market strategist at IG Index, said. "I think it's injected another tone of caution into markets."
Risk-sensitive banks took the most points off the blue chip index, with analysts also pointing to ongoing concerns over eurozone sovereign debt. Miners were out of favour, with metals prices hurt on Friday by talk of tighter monetary policy in leading consumer China. Chip designer ARM Holdings was the heaviest FTSE 100 faller, down 4.7 percent, as investors took profits following the 14 percent advance by the stock since the start of 2011, driven by its tie-up with Microsoft.
J.P. Morgan repeated its "underweight" stance on ARM, arguing the stock is overvalued. Tobacco issues weighed heavily on the FTSE, with Imperial Tobacco and British American Tobacco losing 1.8 and 2.2 percent respectively as Citigroup cut ratings for both firms to "hold" from "buy", in a sector review. On the upside, auto parts firm GKN was the top blue chip gainer, up 4.4 percent, as UBS raised its target to 220 pence from 180 pence in a sector review.