Britain's top share index inched down on Friday, weighed by weaker banks after a surprise drop in US non-farm payrolls, although the data raised quantitative easing expectations which lifted commodity prices. At the close, the FTSE 100 was 4.52 points or 0.1 percent lower at 5,657.61. The index gained 1.2 percent over the week and hit a five-month closing peak on Wednesday.
"The jobs report disappointed and, with US markets closed on Monday, investors have no reasons to get involved, so FTSE just drifted," said Mic Mills, head of electronic trading at ETX Capital. Banks were the biggest drag on the blue chip index, with Barclays the worst off, down 2.2 percent after an effective stake sale by a key Abu Dhabi investor.
Abu Dhabi exercised 131.6 million warrants in the bank, equivalent to a 1.1 percent stake, and simultaneously entered into a hedging arrangement with Nomura, it said in a statement after Thursday's close. Other banks also fell back, with Lloyds Banking Group and HSBC losing 0.7 percent and 0.5 percent respectively, on global recovery concerns, and with results set to flow from their US peers in the next few weeks.
"The Fed may well be poised to pump more money into the economy as jobs keep being shed, but the markets focus will shift to corporate matters next week, with some key earnings due out, so investors are staying nervous," Mic Mills added. US blue chips were 0.5 percent higher by London's close as investors took heart from possible further Fed action as the employment picture stayed gloomy, and with the Columbus Day public holiday to provide a break on Monday.
Weak energy stocks were also a drag in London, with BP off 0.3 percent, although crude prices recovered after the jobs data as the dollar fell back. But miners were the biggest FTSE 100 gainers as metal prices rose with the weaker dollar, and on expectations that more quantitative easing could lift global demand for metals. Platinum miner Lonmin was the top FTSE 100 gainer, up 3.9 percent, while Xstrata gained 2.9 percent, and gold miner Randgold Resources added 2.2 percent.
Mexican silver miner Fresnillo missed out on the gains, losing 3.2 percent after Merrill Lynch cut its rating on the stock to "underperform" from "neutral". Sage Group was the top FTSE 100 faller, down 4.6 percent after UBS downgraded its rating on the accountancy software firm to "sell" from "neutral", with the broker highlighting a number of problems for Sage's new CEO.
Among the mid caps, Thomas Cook was a good gainer, up 3.4 percent after Europe's second-biggest tour operator said it plans to merge its town centre and foreign exchange business with that of British retailer the Co-operative Group to create the country's largest retail travel network. On the domestic macro front, British manufacturers' raw materials costs rose almost twice as fast as expected last month, propelled by higher wheat prices, taking the annual rate well above expectations, official data showed on Friday.