* FTSE 100 down 0.1 pct, investor sentiment muted on
* Q2 GDP data in focus after IMF upgrades
* RBS jumps 14 pct, biggest one-day gain in four years
* BSkyB deal hits shares, Burberry weaker on LVMH
LONDON, July 25 UK shares edged lower in early
trading on Friday, ahead of second quarter GDP data, as
investors digested a raft of corporate results and Royal Bank of
Scotland enjoyed an unexpected pop from earnings.
Investor sentiment was muted across Europe, held back by
disappointing earnings on both sides of the Atlantic and by a
third consecutive monthly fall in the widely followed German Ifo
survey of business sentiment.
Merger activity also dominated early trading, with BSkyB
agreeing to pay 4.9 billion pounds ($8.3 billion) in
cash to buy Rupert Murdoch's pay-TV assets in Germany and Italy.
Construction companies Balfour Beatty and Carillion
rallied after confirming merger talks.
The FTSE 100 index was down 0.1 percent, slightly better
than Germany's DAX and the French CAC 40, while
the pan-European FTSEurofirst 300 was down 0.2 percent.
A preliminary reading of second quarter British gross
domestic product was in focus after the International Monetary
Fund this week upgraded its forecasts for the UK economy.
"Today's first iteration of Q2 GDP could well be a good
indicator of how well the UK economy is shaping up for the rest
of the year," CMC Markets analyst Michael Hewson said.
Shares of RBS soared 14.5 percent, their biggest intraday
gain in at least four years, after the lender released earnings
a week early that were much better than expected.
Network operator Vodafone was also up 2.2 percent
after saying its performance had begun to stabilise in several
European markets even as a slowdown in Spain and South Africa
led to another heavy drop in its key revenue measure.
Meanwhile, BSkyB fell 2.4 percent, the worst performer on
the FTSE 100, with traders citing the placement of shares
representing around 10 percent of the company's capital to help
pay for its announced asset purchases.
Burberry fell 1.9 percent after French luxury goods
group LVMH posted below-forecast second quarter sales
and profits, hit by a drop in demand from China.
Another heavy faller was drugmaker GlaxoSmithKline,
down 1.8 percent. The company faces new allegations of
corruption, this time in Syria, where the drugmaker and its
distributor have been accused of paying bribes to secure
business, according to a whistleblower's email.
Publisher Pearson posted a 41 percent slump in
first-half profit, reflecting increased restructuring charges,
currency movements and phasing in of revenues into the second
half, though an increased dividend helped the stock trade
(Reporting by Lionel Laurent; Editing by Catherine Evans)