* FTSE up 0.2 percent
* BSkyB falls as doubts grow over News Corp takeover
* Wolseley buoyant ahead of U.S. jobs
By David Brett
LONDON, July 8Satellite broadcaster BSkyB
weighed on Britain's top share index on Friday, as
doubts grew over its takeover by Rupert Murdoch's News Corp
The FTSE 100 was up 9.35 points, or 0.2 percent, at
6,063.90 by 1114 GMT, having gained 0.9 percent in the previous
session after U.S. private employment showed sharp gains in May,
leaving investors more optimistic ahead of Friday's nonfarm
payrolls due at 1230 GMT.
BSkyB fell 4.5 percent after the British government
said on Friday it would take the closure of the Murdoch tabloid
News of the World, at the heart of a phone hacking scandal, into
consideration when deciding on the mogul's planned $14 billion
bid to buy BSkyB.
Howard Wheeldon, senior strategist at BGC Partners said he
expects the deal to be delayed rather than stopped, unless more
drastic revelations surface.
"The UK government has to be very careful. It can delay but
can only prevaricate on the basis of what the rules of the game
are. I don't think its got much ammunition left to stop this
thing going through"
Small cap Trinity Mirror , which owns the Sunday
Mirror and the People newspapers, rose 7.6 percent as analysts
predicted the demise of the News of the World will benefit rival
Wolseley was the top FTSE riser, up 1.7 percent, as
traders bought up the housebuilder as a proxy to the fortunes of
the U.S. housing market given its exposure to world's biggest
Many economists raised their nonfarm payroll forecasts on
Thursday after the stronger-than-expected reading on U.S.
private hiring from payrolls processor ADP, and they now expect
gains of anywhere between 125,000 and 175,000. [ID;nN1E76615N]
Retailer Marks & Spencer added 1.9 percent following
recent weakness and ahead of a trading update next week.
The FTSE 100 index has risen nearly 7 percent since touching
three-month lows 12 days ago, driven mainly by hopes that Greece
will avoid defaulting on its debts.
However, with the index approaching 2011 highs of around
6,105, the rally has begun to run out of steam.
Analysts at Charles Stanley said: "We would really need to
see a close above 6,160 or so to persuade us that a break to the
upside is underway, not least because that level has provided
such keen resistance."
On the downside, blue-chip miner Vedanta shed 2.1
percent with traders citing worries over the threat of a
punitive mining tax in India.
"Hearing that Vedanta off as the Indian government are
drawing up a draft law to tax Indian mining companies to provide
welfare of people affected by mining companies," a London-based
Meanwhile, ARM slid 2.6 percent from a four-month
high reached on Thursday, after smartphone maker LG Electronics
Inc cut its 2011 targets and on concerns that
inventories of chips are edging higher.
Concerns over the outlook for the UK economy resurfaced on
Friday, the day after the Bank of England kept interest rates at
British factory gate inflation rose unexpectedly strongly in
June to its highest since October 2008, heralding further upward
pressure for consumer prices, while poor construction data added
to fears of second-quarter stagnation for the whole economy.
(Additional reporting by Tricia Wright and Paul Sandle;
Editing by Erica Billingham)
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