Commods push FTSE lower; eyes on U.S. jobs data

* FTSE 100 index falls 0.3 percent

* Commodity issues weaken on back of fall in metals prices

* Tobaccos on slide; Citigroup cuts ratings

By Jon Hopkins

LONDON, Jan 7 (BestGrowthStock) – Britain’s leading share index was
lower by mid-session on Friday, hit by weaker commodity issues,
with investors cautious ahead of December’s U.S. jobs report
after data in the previous session dented recovery hopes.

At 1151 GMT, the FTSE 100 index (.FTSE: ) was 18.55 points
lower, or down 0.3 percent, at 6,000.96, above session lows
having dipped below 6,000.

U.S. stocks (Read more about the stock market today. ) futures (DJc1: ) (SPc1: ) were lower awaiting the
jobs report, with disappointing retail data and jobless claims
on Thursday hitting recent confidence in recovery hopes.

“Yesterday was a bit of a turning point after a good start
to the year,” said David Morrison, market analyst at GFT Global.
“It’s been a good excuse to take metals prices lower and now we
are sitting back to see what happens next.”

Miners were the worst blue-chip performers, led by Fresnillo
(FRES.L: ) and African Barrick Gold (ABGL.L: ), down 3.3 and 2.2
percent respectively, with metal prices pushed down by a firmer
dollar and talk of tighter monetary policy in leading consumer
China.

Energy issues were lower as a sector (.FTNMX0530: ). BG Group
(BG.L: ) bucked the trend, up 0.9 percent, supported by a Deutsche
Bank upgrade to “buy” from “hold” in a sector review.

Tobacco issues were heavy fallers, with Imperial Tobacco
(IMT.L: ) and British American Tobacco (BATS.L: ) losing 2.2 and 1.7
percent respectively as Citigroup cut ratings for both firms to
“hold” from “buy”, in a sector review.

RETAILERS RALLY

Retailers bounced back from falls this week that were
prompted by a batch of trading updates showing declines in sales
due to severe weather in the run-up to Christmas.

Next (NXT.L: ), which issued its statement on Wednesday,
gained 1.3 percent, helped by an RBS upgrade to “buy”, while
Marks & Spencer (MKS.L: ), which will post its update next
Tuesday, added 0.3 percent.

“M&S, the best proxy for the strength of middle-class
consumer spending on food and clothing … looks undervalued on
only 10 times the new year (estimates),” said Nick Bubb, retail
analyst at Arden Partners.

Luxury goods firm Burberry (BRBY.L: ) also rallied after a
retail-related sell-off, ahead 0.7 percent with support from an
HSBC price target increase in a bullish sector review.

Auto parts firm GKN (GKN.L: ) was the top blue-chip gainer, up
1.4 percent, as UBS raised its target to 220 pence from 180 in a
sector review.

Chip designer ARM Holding (ARM.L: ) was the heaviest FTSE 100
faller, down 4.8 percent, as investors took profits following
the 14 percent advance by the stock since the start of 2011
driven by confirmation of its tie-up with Microsoft.

JP Morgan repeated its “underweight” stance on ARM, arguing
the stock is overvalued.

UK blue-chips are up 1.7 percent after the first shortened
trading week of 2011, having gained 6.7 percent in December.

(Editing by David Hulmes)