* FTSE 100 up 8.16 points at 6,721.34
* G4S gains as HSBC upgrades and floats breakup potential
* RBS boosted by Carney's softer tone on banks
* BSkyB falls as Macquarie downgrades on earnings worries
By David Brett
LONDON, Oct 25 London's blue chip index inched
higher on Friday to chalk up a third straight week of gains,
although demand to buy at levels just shy of multi-year highs
The FTSE 100 closed up 0.1 percent, or 8.16 points,
at 6,721.34 points, just 1.8 percent off a 13-year high reached
back in May.
The index slumped in June but has since climbed almost all
the way back as concern over an imminent withdrawal of U.S.
monetary stimulus, a big driver for equities, has faded.
Volumes were low at 80 percent of the 90-day daily average,
suggesting many investors were staying out of the market.
Leading the index higher was Royal Bank of Scotland,
up 3.3 percent after a speech from Bank of England governor Mark
Carney on Thursday struck a new, softer tone on the country's
lenders, traders said.
FTSE valuations are above their 10-year average, and on a
12-month forward price-to-earnings ratio are up 16 percent since
mid-June, Thomson Reuters Datastream showed, potentially curbing
demand to chase the traditional end-of-year rally.
"A year-end rally may not happen because investors are too
tempted by year-to-date profits. The selling, if it is not
already under way by the U.S. Thanksgiving Holiday (Nov. 28),
could snowball from then," said Alistair Winter, investment
strategist at Daniel Stewart.
The steady stream of downgrades in analyst expectations of
future earnings for FTSE firms, according to Thomson Reuters
data, is also unlikely to help.
Technical charts, however, showed that while the index might
encounter some near-term consolidation, there was scope for
Valerie Gastaldy, head of technical analysis firm Day By
Day, said the FTSE 100 was slowly breaking out of a
consolidation pattern that had August and September peaks as its
"It should quietly move back to its all-time high (6,950.60)
by the end of November or so," she said.
Other winners on Friday included G4S, which climbed
2.2 percent, with traders citing an HSBC note in which the
investment bank upgraded the security services firm to "neutral"
from "underweight" and talked up the break-up value of the
group, as the catalyst.
The world's biggest security services firm said its UK chief
executive Richard Morris had resigned at a time when the group
was trying to recover from a series of damaging setbacks.
BSkyB shed 2.2 percent with traders citing a note
from Macquarie, in which the broker cut its rating to "neutral"
from "outperform" on concerns that a coming auction for rights
to show Champions League football could hit earnings.
"With limited upside from current share price levels,
potential for negative sentiment coming from another aggressive
rights auction, and risk in the coming quarters that BT begins
to impact BSY's broadband growth as marketing levels are
sustained, we see 5 percent downside," Macquarie said.
(Editing by Susan Fenton)