Flat UK shares capped by growthComment on this story
Britain's top share index was flat on Friday, holding below a two-month trading range it broke though in the previous session on concerns about European growth and US budget talks.
By 10:56 SA time, the FTSE 100 was virtually unchanged at 5,678.47, having finished below 5,700 on Thursday to mark an end to the rangebound trading that had persisted since early September.
“Our intraday bias is bearish,” Trading Central said in a note, citing a resistance threshold at 5,793, the 50 percent Fibonacci retracement level of the index's previous downward move.
That reflects caution ahead of likely tough budget talks later on Friday between US President Barack Obama and Republican congressmen.
“Jitters continue in the US about the fiscal cliff and euro (economic) issues. However, markets look oversold and may bounce from here or the slightly lower level of 5,635,” Securequity sales trader Jawaid Afsar said.
In a sign of the worsening economic backdrop in Europe, 43 percent of companies in the region have missed earnings expectations. That compares with more 60 percent of US companies beating forecasts.
Analysts have also cut fourth quarter earnings forecasts for European companies by an average of 3.4 percent over the last 30 days, according to Thomson Reuters Starmine data.
Earnings concerns were a factor in the biggest declines by individual stocks in London's blue chip index.
Buyout group Melrose tumbled 14 percent after saying its sales outlook for 2013 has become uncertain.
Water company Pennon shed 1.6 percent as brokers cut estimates following a profit warning on Thursday.
Wm Morrison fell 1.2 percent as UBS cut its recommendation on the UK's no.4 supermarket on valuation grounds.
The FTSE 100's top gainers on Friday tended to be companies that have offered reassurance about their earnings.
IMI, which makes valves, power-generation equipment and fluid control systems, rose 2.8 percent after it said trading in the second half was in line with expectations.
British outsourcer Serco Group gained 2.5 percent after it said it was on track to meet full-year guidance after contract wins kicked in to boost second-half revenue. - Reuters