* FTSE down 0.1 percent
* Caution over Europe growth, U.S. jobs
* Banks top fallers curbed after recent gains
* Tate & Lyle boosted by pension deal
By David Brett
LONDON, Dec 7 Britain's FTSE 100 was flat early
on Friday as caution over growth in Europe and U.S. jobs data
prevented the index punching through fresh two-month highs,
although momentum for the time being remains on the upside.
London's blue chip index was down 2.28 points points
at 5,899.14 by 0855 GMT, having closed at its highest level
since mid October in the previous session.
Volumes were at just 5.9 percent of their 90-day daily
average, compared with roughly 10 percent usually by that time.
"(Thursday's) move puts the index in a position to rally
further if investors decide to bite the bullet and buy
strength," James Hyerczyk, an analyst at Autochartist, said.
"Based on the strong close, it looks as if sentiment is
still to the upside; however a break back under 5,852.90 will
signal that momentum has shifted back to the downside," he said.
The index was struggling after Germany's Bundesbank cut its
outlook for next year to say it expects minimal growth, and
there was slight caution ahead of November U.S. jobs data that
is expected to be weaker than October's, hit by superstorm
The rally of more than 5 percent in the last two weeks on
the FTSE 100, fueled by an easing of worries over the euro zone
and the U.S. fiscal cliff, has left the index at the top of a
range established since September.
"The feeling is that although there are still many issues to
be resolved they are broadly moving in the right direction," Tim
Rees, UK fund manager at Insight Investment, said.
"That does not mean we are not going to get a fright
somewhere down the line but you can see why, in the absence of
falling off a cliff, equities have a value attraction on an
historical basis in comparison to other assets classes," he
Rees said he is fully invested and has been "risk on" for
sometime now, taking advantage of cheap stocks like those on the
FTSE 100, which is trading on a price-to-earnings of 11.8 times
compared with the 10-year historical average of around 14 times.
At the micro level on Friday, the downside was dominated by
recent good gainers such as the banks with
heavyweight HSBC and Standard Chartered down
0.7 percent and 1.6 percent respectively.
"Banks will be structurally unattractive in a deleveraging
and low interest rate environment, given the continuing banking
and sovereign crises," Nomura said in a note, although it rates
HSBC and Standard Chartered among its top picks
On the upside, Tate & Lyle was the top gainer up
1.5 percent after the British starches and sweetener maker
struck deal over its pension scheme, which will see no material
impact on group`s cash flows or adjusted earnings.
(Written by David Brett)