* FTSE 100 falls 0.3 percent
* Financials led lower by Aberdeen after downgrade
* Strong jobs number could see equity sell-off - traders
* Glencore Xstrata, BT lead risers after target price hikes
By Alistair Smout
LONDON, June 7 Britain's top shares slid on
Friday, led down by financials and extending the sharp falls of
the two previous sessions, in cautious trading pending the
month's main U.S. jobs data.
The FTSE 100 was down 16.02 points, or 0.3 percent,
at 6,320.09, by 1045 GMT, having dropped 3.4 percent since
Wednesday to close at a month-and-a-half low on Thursday.
Financials were led lower by Aberdeen Asset Management
, which dropped 4.2 percent following a downgrade by BofA
Merrill Lynch to "underperform" from "neutral".
"People are just taking some risk off ahead of the U.S.
non-farm payrolls number. Volumes are very light at the moment,
which is exacerbating the moves, but we should see those volumes
pick up in the afternoon," Matt Basi, head of UK sales trading
at CMC Markets, said.
The FTSE 100 has dropped around 8 percent over the past two
weeks after U.S. Federal Reserve officials, including Chairman
Ben Bernanke, began discussing exit strategies to their
unprecedented open-ended quantitative easing programme.
British blue chips derive around a quarter of revenues from
the United States, and traders said Friday's jobs report would
help ascertain when the U.S. Federal Reserve might begin to
unwind its monetary stimulus.
The index traded in a 30-point range ahead of the report. A
strong employment number could prove detrimental to equity
markets by reducing the likelihood the Fed will keep the
stimulus taps on for a longer period of time.
"If the number were to come up lower, then they would have
to leave the quantitative easing as the economy isn't doing very
well, and the fear is that a very good number would mean they
have to stop the QE," said Lucas Roux de Luze, trader at TJM
"My feeling is that they aren't going to touch QE before
next year... When Bernanke made these comments, he expected this
market correction, as the market didn't reflect fundamentals,"
he added, saying that such a correction was healthy.
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.
Roux de Luze said the market could end slightly higher if
the number came in line. However, a beat by 50,000 extra jobs
could prompt a sell off of up to 50 points on the FTSE 100.
Aberdeen aside, analyst recommendations and target price
changes helped some stocks higher on Friday.
Glencore Xstrata climbed 2.4 percent, lifted by a
target price hike from Bernstein, to 525 pence from 475 pence,
and a Barclays upgrade to "overweight" helped BT Group
advance 2.6 percent.
(Editing by Ruth Pitchford)