Britain's leading share index fell on Friday, weighed down by heavyweight miners as a recent rally by the sector went into reverse, and investors worried by dramatic political protests in Egypt decided to close positions. At the close, the FTSE 100 index was 83.71 points lower, or down 1.4 percent at 5,881.37, recording a loss of 0.3 percent for the week.
Events in Egypt, where police and demonstrators fought running street battles in Cairo in unprecedented protests against President Hosni Mubarak's rule, made investors cautious. "It is the continued unrest in Egypt that has made investors increasingly risk adverse ... it sseems investors are deciding that taking their money off the table is the sensible approach ahead of the weekend," said David Jones, chief market strategist at IG Index.
A fall among mining stocks was the biggest drag on the blue chip index, with Vedanta Resources the worst off, down 4.5 percent. Investors cited next week's Chinese New Year holidays as a reason for closing positions, on the grounds that demand would briefly slow.
Integrated oils fell, dragged by BG Group as the sector heavyweight reversed recent strong gains linked to Brazil oil find hopes, and countering a jump in the crude price linked to rumours of the possible closure of Egypt's Suez Canal. US blue chips were down 1.0 percent by London's close on Friday, worried by the unrest in Egypt too, as well as disappointing results from Ford Motor Co.
Investors shrugged aside data showing that the US economic expansion gathered speed in the fourth quarter, with GDP up 3.2 percent as consumer spending gained pace. In Britain, following on from a surprise drop in UK GDP this week, data on Friday showed UK consumer confidence tumbled to its lowest in almost two years in January.
The data put UK retailers put back under pressure. Marks & Spencer fell 1.2 percent, while Next lost 1.8 percent. Both were also feeling the effect of downbeat results on Thursday from peer Hennes & Mauritz's. TUI Travel, which gained Thursday after a first-quarter trading update, fell 4.5 percent as Natixis cut the stock to "neutral" from "buy" mainly on valuation grounds.
Inmarsat was the top FTSE 100 gainer, up 2.4 percent after confirming the second phase of its co-operation deal with US firm LightSquared, which brokers said could see upside to market expectations for the value of Inmarsat's US spectrum. The news encouraged Liberium Capital to raise its target price for Inmarsat to 950 pence, up from 900 pence.
Broker comment gave a lift to orthopaedics group Smith & Nephew, up 0.3 percent as Matrix hiked its price target, while luxury goods firm Burberry added 0.2 percent helped by a Unicredit upgrade to "buy" in a sector review. With the month-end one session away, London's blue chip index has seen a promising start to the year hauled back. "Investors are confident that value remains in global equities but recognise that it is likely to be a volatile gradual rally rather than an uninterrupted surge to new highs," said Giles Watts, head of equities at City Index.