Britain's large-caps index a touch lower

Britain's large-caps index closed a touch lower on Friday after giving away gains in late trading, with profit taking on defensive stocks more than offsetting a rally among miners and energy shares. The FTSE 100 closed down 13.5 points, or 0.3 percent, at 5387.34 points, to record a 2.6 percent loss on a week marked by rising concerns over the effectiveness of Europe's response to its debt crisis.
The index traded in positive territory for most of the session, with mining stocks rallying as copper price rebounded from recent losses, helped by signs the United States economy was recovering. Gains petered out in afternoon trade and the FTSE sent a bearish technical signal as it failed to close above the 50 percent retracement of the October-November move at 5,433.8, which it had broken in morning trading.
Volumes were high at 137 percent of the 90-day average, as futures and options expiries drew investors into an otherwise sleepy December market, and contributed to share price volatility. Traders expected volume to come down again next week, regarding bond auctions in Greece and Spain on December 20 as the last key events to watch before Christmas.
"Next week, short-lived price action remains the most probable scenario, with low volume," Trading Central technical analyst, Nicolas Suiffet, said. Suiffet has a bearish stance on the FTSE March futures, which settled 0.2 percent lower at 5,363.5 on Friday.
"As long as the resistance threshold on 5,435 is not penetrated the risk remains to the downside and a fall to the previous low, which is around 5,320, is likely in the forthcoming days." Copper miners Kazakhmys and Antofagasta, each up more than 3 percent, were the best performers on the FTSE, as the price of the red metal rebounded.
However, copper was down around 6 percent for the week, on track for its biggest weekly loss since the end of September and the first annual decline since 2008, when the global credit crunch was at its worst. Mining stocks have fallen over 30 percent since the start of the year, or more than three times as much as the FTSE 350 index, on concerns about deteriorating economic conditions in Europe and slowing growth in big consumers of metal, such as China.
UBS said it was "overweight" miners after their de-rating and Liberum Capital said value in the sector was apparent. At the other end of the spectrum, tobacco and food stocks, which are up 21.9 percent and 4.6 percent this year, were hit by profit takers. "Defensives' performance has been quite strong so they are showing high valuations already, whereas miners and industrials are more attractive," Stefan Hofrichter, chief economist at Allianz Global Investors/RCM and a member of the asset manager's asset allocation committee said.
The media sector also underperformed, weighed down by BSkyB, down 1.2 percent, which was downgraded by Bank of America-Merrill Lynch on cost and competition concerns. The broker also downgraded Anglo-Dutch publishing group Reed Elsevier, down 0.5 percent, citing lack of new catalysts after a strong run, while it upgraded "best of breed" Pearson, sending the stock 0.7 percent higher.