* Miners, banks weak; traders eye defensives
* Diageo, AMEC knocked after results
* Oils firmer as crude price steadies
By David Brett
LONDON, Aug 27 (Reuters) - Britain's top share index was 0.1
percent lower mid-session on Thursday as investors liking for
risk was showing signs of fatigue ahead of a long holiday
weekend following recent hefty gains.
London markets will be closed on Monday.
Banks and miners were the main drag, hit by profit taking,
while drinks group Diageo <DGE.L> dropped after cutting its
profit target, but defensive pharmaceutical and utility stocks,
as well as oils were the main cause for cheer.
By 1110 GMT, the benchmark FTSE 100 <> was down 5.98
points at 4884.60, in a choppy session, after closing 26.22
points lower at 4,880.58 on Wednesday.
Banks were the worst sector performers, with Lloyds Banking
Group <LLOY.L>, Standard Chartered <STAN.L> and HSBC Holdings
<HSBA.L> losing down 0.7-2.6 percent.
Barclays <BARC.L>, however, rallied 0.9 percent, helped by
an upgrade to 'outperform' from 'market perform' by Keefe,
Bruyette & Woods.
Heavyweight miners, which have been major players in the
recovery of the British market were again hit by profit takers,
with Lonmin <LMI.L>, Xstrata <XTA.L>, Eurasian Natural Resources
<ENRC.L>, and Rio Tinto <RIO.L> losing 0.5-1.7 percent.
Kazakhmys <KAZ.L>, however, gained 3.8 percent after the
copper producer posted a better-than-expected 28 percent fall in
first-half earnings per share, and said it should beat its
full-year output target. [].
"There is a small piece of risk aversion having come so far
so quickly. Before any potential economic recovery is definitely
confirmed there is an amount of tactical switching between
defensive and cyclical stocks," said Richard Hunter, head of UK
Equities at Hargreaves Lansdown Stockbrokers.
"Were now looking towards the summer bank holiday in the UK
and Labor Day in the U.S., after which everyone will be back at
their desk, there will be more volume going through the market
and certainly more focus."
The FTSE has rallied 42 percent since hitting an all-time
low in March and has rebounded 10 percent so far this year
thanks to brightening economic data and improving corporate
earnings.
Among individual fallers, Diageo <DGE.L>, the world's
biggest spirits group, fell 3.9 percent after cutting its profit
target this year due to concerns about the strength of any
recovery. []
Oil services and engineering group Amec <AMEC.L> lost 4.2
percent as investors locked in profits after it reported a 25
percent increase in first-half profit. []
DEFENSIVES, OILS WANTED
Oil majors moved higher as crude prices <CLc1> stabilised.
Royal Dutch Shell <RDSa.L>, BG Group <BG.L>, Tullow Oil <TLW.L>,
and Cairn Energy <CNE.L> rose 0.3-0.9 percent.
Drugmakers was the top performing sector led by a 1.7
percent rise in GlaxoSmithKline <GSK.L>, while AstraZeneca and
Shire <SHP.L> put on 1.4 and 0.5 percent, respectively.
Danish biotech firm Genmab <GEN.CO> said late on Wednesday
it got positive top-line results from a phase II study of its
Arzerra cancer drug, co-developed with GlaxoSmithKline.
Utilities also saw interest, with Centrica <CNA.L>, Pennon
<PNN.L> and Severn Trent <SVT.L> up 0.9-1.0 percent.
Smith & Nephew <SN.L> rose 4 percent, after comment in the
Lex column in the Financial Times on the effect of the ageing
"baby boomer" generation on the medical device sector.
British economic data was mixed on Wednesday. A CBI report
showed retail sales fell faster than expected in August after a
sharp drop in durable household goods. []
Meanwhile, house prices rose for the fourth month running
and at their fastest monthly rate in 2-1/2 years in August, the
Nationwide Building Society said. []
Investors, however, eyed the second reading for U.S.
second-quarter GDP, due at 1230 GMT. Economists see a 1.5
percent contraction after the economy shrank 1 percent on an
annualised basis on the first reading.
U.S. initial jobless claims are also due at 1230 GMT.
Stock index futures pointed to a opening mixed in the United
States, with the Dow Jones <DJc1> up 0.1 percent, while the S&P
500 <SPc1> and Nasdaq <NDc1> were pointing down 0.1 percent.
(Editing by Dan Lalor)
