* Blue-chip FTSE 100 index falls 0.4 percent
* Petrofac slides 15.2 pct after profit warning
* IAG hit by profit-taking after posting results
* FTSE 100 about 2 pct away from record high
By Tricia Wright
LONDON, May 9 Britain's top share index slipped
from a 10-week high on Friday, led lower by Petrofac, as
a profit warning by the energy services group added to signs of
poor corporate earnings that have kept the market's rally in
Petrofac sank 15.2 percent after warning its 2014 net profit
would fall by as much as 11 percent, to between $580 million and
$600 million, because of a poor performance from its Integrated
Energy Services division.
Analysts said the weak results are being punished more than
they would have been in the past, after a powerful rally in 2013
in anticipation of encouraging earnings.
Around two-thirds of companies listed on the pan-European
STOXX Europe 600 index have posted first-quarter
updates so far. Of those, half have missed consensus earnings
forecasts, according to Thomson Reuters StarMine data.
That has left valuations looking full, but a recovering U.S.
economy should help pick up the slack. A drop in initial jobless
claims on Thursday was the latest signal the U.S. labour market
The FTSE 100 index trades on a 12-month forward
price/earnings ratio of around 13 times, against its 10-year
average of about 12 times, Thomson Reuters Datastream shows.
"Individual share prices are likely to react very poorly
when you have profits warning like Petrofac ... but the overall
market is likely to be driven higher by improving economic
momentum out of the U.S," Gerard Lane, equity strategist at
Shore Capital, said.
The broader FTSE 100 index closed down 24.68 points,
or 0.4 percent, at 6,814.57 points. It had risen to a high of
6,840.37 on Thursday, its highest since late February.
BETTER TO TRAVEL THAN ARRIVE
International Consolidated Airlines Group had the
second-biggest decline in the FTSE 100, off 4.8 percent.
Investors were locking in profits on the British Airways owner,
which has risen around 40 percent in the last 12 months.
IAG reported better-than-expected first-quarter results on
Friday. Losses at troubled Spanish carrier Iberia halved,
putting it on course for higher annual profits.
"There was a lot of good news in that price. The figures I
think were pretty good really - there's nothing of any major
issue," Galvan's head of trading Ed Woolfitt said.
While the broader market came under pressure on Friday, it
was just some 2 percent away from the all-time high it set in
December 1999. Charts suggested it had the potential to set new
highs in the near future.
FOREX.com technical analyst Fawad Razaqzada said a close
above 6,835, a level where the index is running into resistance,
should pave the way for further gains.
"It is just a matter of time before we revisit or surpass
the previous record highs," he said.
(Additional reporting by Atul Prakash; Editing by Larry King)