February 10, 2012 / 12:40 PM / 6 years ago

FTSE falls as Greek debt deal wait goes on

* FTSE down 0.4 percent
    * Miners fall as Greece and China cloud demand outlook
    * Greeks' strike as EU ministers ask for more cuts
    * Barclays rises despite profit miss

    By David Brett	
    LONDON Feb 10 (Reuters) - Britain's top share index
was slightly lower on Friday, as weak China imports prompted a
bout of profit taking in the mining sector and as uncertainty
over a bailout for Greece dragged on.	
    The UK's benchmark index was down 24.08 points, or
0.4 percent at 5,871.39 by 1149 GMT, still hovering around
six-month highs.	
    Miners were the biggest weight on the index as
investors banked gains from a sector that had risen as much as
22 percent since the start of the year.	
    Appetite for mining companies has waned over the past week
in response to some mixed earnings and China consumption
concerns.	
    The pace of growth in China, the world's most voracious
consumer of commodities, remains a worry for investors and data
from the country, which showed crumbling imports for January,
stoked fears of a slowdown in demand. 	
    Miner Anglo American fell 2.5 percent as diamond
producer De Beers, of which Anglo owns 45 percent, reported a
dip in annual production and said it expected to continue to
rein in output growth in 2012. 	
    Greece's inability to agree terms acceptable to its
creditors to trigger a second bailout package also weighed on
the market.   	
    Greek workers went on strike against austerity measures on
Friday, docking ships and halting public transport, hours after
euro zone finance ministers said Athens needed to make more cuts
to convince them to release the bailout cash. 	
    "The market is starting to factor in continuing problems
with Greece and if it does default the belief is that it will be
contained, and central banks will standby ready to flood the
banks with liquidity," David Morrison, strategist at GFT Global,
said.	
    "Ultimately the problem of how the central banks will
eventually wind down their balance sheets is just a problem for
another day," he said.	
    	
    EARNINGS CONCERNS	
    European fourth-quarter earnings reports from the STOXX
Europe 600 are finely balanced, with energy firms
posting the biggest positive surprise so far and financials
lagging expectations by the biggest margin, Thomson Reuters
StarMine data to the Thursday close shows.	
    Cable and Wireless Communications shed 12.7 percent
after it warned that increasing competition and weak demand from
corporate clients had hit its business in Panama, taking the
shine off solid performances elsewhere. 	
    With risk appetite on the wane given the macro outlook,
banks were mainly lower, although Barclays
 bucked the weaker trend, up 2.3 percent albeit in
choppy trade, as it reported mixed results. 	
    The UK lender warned it may miss its medium-term
profitability target after its investment bank ended 2011 with
its worst quarter for three years. 	
    "Investors are for the moment giving the bank the benefit of
the doubt as a recovery play, such that on reflection the
general market view of the shares as a buy should remain
intact," said Richard Hunter, head of equities at Hargreaves
Lansdown Stockbrokers. 	
    For those looking for exposure to diversified financials in
the face of global macro uncertainty, Goldman Sachs recommended
UK asset managers over "market structure companies" as the
latter segment is set to suffer from the consequences of
continued bank deleveraging and tougher regulation. 	
    Accordingly, the broker downgraded inter-dealer broker Icap
 to "neutral" from "buy" - contributing to a 3.8 percent
fall in the shares, while it upgraded asset manager Schroders
 to "buy" from "neutral".	
    Another asset manager Man Group fell up to 3.3
percent, after recent gains and in tandem with other financials
including insurers, as macro concerns returned to the
fore.	
    With risk appetite among investors receding, defensives were
among the top performers. Drugmaker Shire rose 1.8
percent.	
    Deutsche Bank said it recommended highly-rated stocks whose
share price has performed well. 	
    The bank said its "Leaders" portfolio included a lot of
healthcare companies, which fitted well with its 'defensive
value' strategy, Deutsche's analysts said.	
    Next, which is viewed as a defensive stock in the
retail sector, climbed 1.8 percent as Deutsche bank raised its
rating on the firm to "buy" from "hold".	
    Next would have also received a boost from a fall in British
factory gate inflation to its lowest in more than a year in
January as input costs also rose at a much slower pace, data
showed. 	
    Wall Street futures pointed to a lower open in the United
States, ahead of December international Trade data at 1330 GMT.
Economists in a Reuters poll expect a trade deficit of $48.0
billion in December versus a deficit of $47.75 billion in
November. 	
    Preliminary figures from the Thomson Reuters/University of
Michigan Surveys of Consumers will be released at 1455 GMT.
February's preliminary consumer sentiment index is expected to
come in at 74.5 compared with a 75 reading in the final January
report.

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