* FTSE 100 gains 0.2 percent
* BP down on U.S. law suit
* Defensive tobacco, pharmaceuticals gain
By Simon Falush
LONDON, Dec 16 (Reuters) - Gains from defensive tobacco and
pharmaceuticals stocks helped push Britain's top share index
slightly higher on Thursday, offsetting weakness from BP <BP.L>,
after the launch of a U.S. lawsuit over the gulf oil spill.
By 1153 GMT the FTSE 100 <> was 0.2 percent higher at
5,891.15 after it ended down 9.03 points, or 0.2 percent on
Wednesday, snapping a four-session winning streak. It finished
at its highest close for 30 months on Tuesday.
Futures and options expiries made for skittish trade.
Quadruple-witching expiries of index and individual company
futures and options went through at 1000 GMT in London on
Thursday.
BP took most points off the index, falling 1.8 percent on
investor anxiety that U.S. government legal action might make
the cost of the oil spill much greater than earlier thought.
Trade overall was light, with investors reluctant to take
big new positions as activity winds down in the run-up to the
festive period.
"We've had a decent run in equities as sentiment has
recovered and technical indicators have rebounded so it's
natural that the market will be taking a breather... and
activity is dying down as we move to the end of the year," said
Ronan Carr, European equity strategist.
The FTSE 100 is up 6.1 percent so far this quarter after a
12.8 percent gain for the third quarter.
DEFENSIVES BOOST
Investors rotated into stocks perceived as better able to
weather a harsh economic climate, with drugmaker AstraZeneca
<AZN.L> up 0.5 percent, brewer SABMiller up 1.4 percent and
British American Tobbacco <BATS.L> gaining 0.8 percent.
Business support services companies also lent support to the
index after Serco <SRP.L> said its guidance for 2010 remained on
track prompting Investec to repeat its "buy" rating on the
stock. [] []
It gained 2.9 percent while peer Capita <CPI.L> gained 0.7
percent as sentiment on the sector was bolstered.
British retail sales rose at a slightly weaker than expected
pace in November but the previous month's growth was revised up,
leaving the broad picture unchanged from analysts' forecasts.
[]
Across the Atlantic, the latest U.S. weekly jobless claims
numbers will be released at 1330 GMT together with November
housing starts, while December's Philly Fed index will be
released at 1500 GMT.
European leaders sought to paper over deep divisions on how
best to resolve the debt crisis ahead of a summit on Thursday.
Spain and Portugal came under renewed pressure to get their
finances in order. []
Among second tier stocks <> Sports Direct <SPD.L> was
the strongest gainer, up 6.2 percent after Britain's biggest
sporting goods retailer said the recent cold snap had been a
"net positive" as winter products were in demand.
[]
Technical factors were seen pressuring the UK blue-chip
index.
"Unless the market can find its footing back above 5,900 the
technical indications are for a corrective move from here, with
key support levels at 5,850 and 5,790 likely to be tested on any
further profit-taking action," said Jonah S. Ford, analyst at
Autochartist.
"The breakout of the Rising Wedge chart pattern, if
successful, portends a downside price target ranging from 5,841
to 5,820 in the near term."
(Editing by Jane Merriman)
