* FTSE 100 edges 0.1 percent lower
* Three week rally left the market near all time highs
* Mondi the latest upbeat earnings report
* Pearson issues profit warning
By Alistair Smout
LONDON, Feb 28 Britain's top share index held
steady on Friday, leaving it set to post its best month in seven
after a three-week rally that has left it within touching
distance of its all-time high.
While that rally has stalled this week, the FTSE 100
is just 2 percent below its record peak, set in 1999.
Shares rallied strongly after hitting a 2014 low in early
February, but have fallen 0.4 percent since Monday as political
turmoil in Ukraine and fresh concerns about China's economy have
revived concerns about emerging markets.
The 4.7 percent gain posted so far this month would make it
the best February since 1999.
"The market looks overvalued, and there's potential
complacency creeping in, just as we were in mid-January before
the emerging market scare," said Jeremy Batstone-Carr, analyst
at Charles Stanley.
"Investors are clearly looking to downplay the threat of
contagion, however, and the FTSE feels as though it wants to go
through its record before it takes a breather."
Supporting the rally has been a decent earnings season, in
which 69 percent of companies that have reported quarterly
earnings so far have beaten or met expectations.
South African paper maker Mondi was the FTSE's top
riser, up 3.9 percent, after it posted higher 2013 full-year
earnings on Friday, helped by benefits from acquisitions in its
But earnings on Friday were mixed, with publisher Pearson
down 6.8 percent after it warned that it expected
earnings to fall in 2014.
It reported results within the range of already downgraded
forecasts due to the hit from the deteriorating U.S. education
"They're pretty awful figures. They're trying to rebuild
around this U.S. education division, which has caused a real
weakness here," ETX Capital head of trading Joe Rundle said.
"I wouldn't want to be long. They're betting on a losing
horse. They don't have the scale to compete in this industry."
The FTSE 100 was down 5.62 points, or 0.1 percent,
at 6,804.65, with the drop in Pearson accounting for nearly half
the index's fall.
The FTSE underperformed continental European shares, which
were buoyed by the prospect of further European Central Bank
easing if inflation data at 1000 GMT points to deflation risks
in the euro zone economy.
The threat of below-target inflation is prompting the ECB to
consider additional stimulus measures on top of record-low
rates, just as the U.S. Federal Reserve is winding down its own
"There's some anticipation that we might see some monetary
policy easing, maybe from the ECB next week," Charles Stanley's
"Without the Fed's liquidity infusion, it's no surprise then
that the market is looking to Europe to be the liquidity
generating region of choice."