Britain's FTSE steadies, U.S. jobs data eyed

Fri Jun 7, 2013 4:20am EDT

* FTSE 100 down 0.1 percent

* Traders expect FTSE drop if U.S. jobs data strong

* BT, Land Secs boosted by analyst recommendation upgrades

By Tricia Wright

LONDON, June 7 (Reuters) - Britain's top shares edged lower on Friday, steadying after steep falls in the previous session, with market moves likely to be muted ahead of U.S. jobs data.

The FTSE 100 was down 4.76 points, or 0.1 percent, at 6,331.35 by 0800 GMT, having skidded 1.3 percent lower on Thursday, recording its weakest close in a month and a half.

Traders said that Friday's jobs report could prove key in ascertaining when the U.S. Federal Reserve might begin to unwind its monetary stimulus.

Mounting uncertainty over the Fed's intentions regarding its asset purchase plan has put investors on edge recently, with the FTSE 100 dropping around 8 percent over the past two weeks.

"With the NFP (non-farm payrolls) figure being touted as one of the most important in a while, I think we will be stick in a holding pattern until we see that data," Nick Xanders, head of European equity strategy at BTIG, said.

Economists expected the non-farm payrolls report, due at 1230 GMT, to show job growth of 170,000 in May, against 165,000 in April. The unemployment rate is seen steady at an almost 4-1/2-year low of 7.5 percent.

A strong employment report could prove detrimental to equity markets by reducing the likelihood the Fed will keep the stimulus taps on for a longer period of time.

"We're in this funny reverse psychology where a good number could spell the end of QE (quantitative easing) and that's what the big fear is. If it's 170,000-200,000, then that's a good number," Mark Priest, trader at ETX Capital, said.

Priest reckoned any sell-off could be "quite severe" - in the region of around 1 percent on the FTSE 100 - although in the case of a negative number under 170,000, he did not envisage a sharp market reaction.

Henk Potts, market strategist at Barclays, however, does not believe the Fed will start scaling back its monthly asset purchases until first-quarter 2014, and does not see an interest rate rise in the United States until first-quarter 2015.

Analyst recommendation and target price changes were behind some of the sharpest market moves from individual equities on Friday, in what was a quiet day on the corporate calendar.

Glencore Xstrata climbed 1.7 percent, lifted by a target price hike from Bernstein, to 525 pence from 475 pence, a Barclays upgrade to "overweight" helped BT Group advance 2 percent, with Land Securities up 1.7 percent as JPMorgan lifted its rating on the stock to "overweight". (Reporting by Tricia Wright)