The country's leading share index ticked lower on Friday, consolidating after strong gains in the previous session, with a strong take-up for Greece's bond swap deal discounted as investors sought fresh direction from key U.S. jobs data.
U.S. February nonfarm payrolls, due at 1.30 a.m, are forecast to have risen 210,000 in February, after a 243,000 increase in the previous month, with the jobless rate seen steady at 8.3 percent.
However, after recent above-forecast U.S. private payrolls data, some commentators believe the official payrolls number could comfortably beat expectations too, which could limit the likely upside potential from good numbers.
Balancing this, Greece said on Friday that 85.8 percent of private creditors had accepted its bond swap offer and that the rate would reach 95.7 percent with the use of collective action clauses to enforce the deal, a move which will trigger a second debt bail-out and avoid a messy default.
At 0912 GMT, the FTSE 100 <.FTSE> index was down 0.78 points, or 0.1 percent at 5,858.95, having jumped 1.2 percent on Thursday.
Diversified pharmaceuticals provided the main underlying strength for the FTSE, led by Shire
The broker upped its rating for pharmaceuticals to overweight in a European equity strategy review, pointing out that the sector's P/E has de-rated relative to the market.
Overall, however, UBS sees risk of some near-term consolidation in the European equity market, given the near one-third re-rating of the P/E multiple since October; some signs that the improvement in PMIs is levelling off; and some tactical indicators are close to extremes.
Reflecting this, the broker downgraded its rating for metals & mining, noting that the sector has been the second-biggest re-rater of the 30 European sectors, with its price/earnings (P/E) multiple up 64 percent since October.
We downgrade the metals & mining sector to neutral. The macro backdrop now appears less supportive and there are some signs of slowing steel demand in China, UBS said in a note.
Miners <.FTNMX1770> were among the biggest FTSE 100 fallers, reversing some of the strong rally seen in the past two sessions as the UBS downgrade countered the benefits of a rise in copper prices, helped by some supportive Chinese data.
China's annual inflation cooled surprisingly sharply to a 20-month low of 3.2 percent in February, well below its 2012 target of 4 percent.
We would suggest that the inflation bubble in China last year is well and truly burst, and so policy easing can accelerate. This would be beneficial for the likes of miners and other emerging market related stocks, said Gerard Lane, equity strategist at Shire Capital.
Negative broker comment also weighed on medical products group Smith & Nephew
On the upside, Old Mutual
(Editing by Hans-Juergen Peters)