Banks lead FTSE lower, investors eye U.S. payrolls

* FTSE down 0.1 percent

* Banks sag as RBS and HSBC report results

* Defensives gain, investors cautious ahead of U.S. payrolls

By David Brett

LONDON, Nov 5 (BestGrowthStock) – Britain’s top share index fell on
Friday as investors locked in gains after the previous session’s
sharp rise, with banks down after results from HSBC and Royal
Bank of Scotland.

The market’s main focus will be on U.S. nonfarm payrolls,
due at 1230 GMT, which are expected to have risen by 60,000 in
October, after a 95,000 decline in the previous month, with the
unemployment rate seen static at 9.6 percent month-on-month.

U.S. stock index futures (SPc1: ) (DJc1: ) (NDc1: ) pointed to a
lower open on Wall Street on Friday, ahead of the data.

By 1150 GMT, the FTSE 100 (.FTSE: ) was down 4.93 points or
0.1 percent at 5,857.86, having shot up 2 percent on Thursday.

That was its highest closing level in nearly 29 months,
following the Fed’s commitment on Wednesday to buy $600 billion
in government bonds to support a struggling U.S. economy.

“The markets may have some upside left in them before the
year-end, but right now it’s looking like a case of too far, too
fast,” Ben Critchley, sales trader at IG Index, said.

“Add to that the fact we have got the non-farm payrolls out
of the U.S. this afternoon, and the accompanying volatility this
brings makes the idea of booking profits seem prudent.”

Banks (.FTNMX8350: ) were the main losers, having risen
sharply in the run up to and after the Fed announcement.

Royal Bank of Scotland (RBS.L: ) dropped 3.7 percent after
reporting third-quarter results. It said it expected challenging
market conditions in the fourth quarter and saw a UK bank tax
adding up to 250 million pounds to its costs next year
[ID:nLDE6A31SL].

Europe’s biggest bank HSBC (HSBA.L: ) fell 1.8 percent with
traders citing profit-taking after it said profits in the third
quarter and for the year to date were “well ahead” of a year
ago. [ID:nLDE6A409P]

“(HSBC’s) results are good … but then in the last couple
of days it has had a very good run,” a London-based trader said.
“I think there’s money being taken off the table here, and
that’s pushing some of these banks back down again.”

DEFENSIVES SUPPORT

Drugmakers were among the top performers on the FTSE 100, as
investors switched out of riskier assets and into perceived
defensive issues, for the time being.

GlaxoSmithKline (GSK.L: ) was up 2.8 percent and peer
AstraZeneca (AZN.L: ) rose 0.3 percent, while Smith & Nephew
(SN.L: ) added 6.2 percent after the orthopaedic products firm
reported third-quarter results. [ID:nLDE6900KC]

Invensys (ISYS.L: ) climbed 1.5 percent as both Morgan Stanley
and Societe Generale hiked their target prices for the
engineering group following results on Thursday.

Back on the downside, Rolls-Royce (RR.L: ) shed 3.3 percent
after planemaker Airbus (EAD.PA: ) said it was asking airlines
that fly its A380 superjumbos to have Rolls-Royce engines
inspected. This follows the engine failure this week of an A380
operated by Qantas Airways (QAN.AX: ). [ID:nLDE6A409X]

Among retail stocks, Wm Morrison Supermarkets (MRW.L: )
dropped 1.3 percent, extending the previous session’s falls when
it issued a cautious outlook. [ID:nLDE6A21DD]

On the economic front, British factory gate inflation slowed
more than expected to a six-month low in August after oil prices
eased, but evidence that wheat prices are pushing up food costs
clouded an otherwise rosy picture. [ID:nLDE6890OS]

Banks lead FTSE lower, investors eye U.S. payrolls