Top share index was flat early Friday afternoon as investors eyed U.S. jobs data that could fuel the next upleg of a three-month rally, after a successful Greek bond swap averted the immediate risk of an uncontrolled default.

London's blue chip index <.FTSE> lost 2.6 points, or 0.1 percent, to trade at 5,857.14 by 1235 GMT, consolidating after strong gains in the previous session, with weakness in energy issues more than offsetting gains in defensive consumer staples.

A deal between debt-laden Greece and private creditors had contributed to large moves earlier in the week, with 1.2 percent added on Thursday, although news of the deal, confirmed before the market open Friday, failed to draw a similar response.

The Greek debt deal was all priced-in, investors know there's loads more that needs to be done. What equity markets are focused on are non-farm payrolls - markets are being driven by better U.S. economic news, Louise Cooper, market analyst at BGC Partners said.

It's a bit of a least ugly baby contest, but generally the news has been better than expected, so if the numbers come out weaker, that might be a bit of a negative jolt, Cooper said.

U.S. nonfarm payrolls 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. The data are due out at 1.30 p.m.

Energy stocks provided the biggest drag, taking 0.1 percent off the index after falls for heavyweights BP and Royal Dutch Shell , down 0.5 percent and 0.9 percent, respectively.

Fresnillo was the top FTSE 100 faller, however, down 3.5 percent as Deutsche Bank downgraded its rating for the Mexican silver miner to hold from buy, trimming its target price by 3 percent on valuation grounds after recent results.

Negative broker comment also weighed on medical products group Smith & Nephew , down 1.6 percent as Goldman Sachs cut its rating to neutral from buy.


Consumer staples provided the main strength for the FTSE, led by drinks firm Diageo , up 1 percent and adding most points to the index.

The similarly defensive healthcare sector also saw decent gains helped by Shire , which added 2 percent in volume more than its 90-day daily average in half a day's trade, supported by an upgrade in sector rating by UBS.

The broker upped its rating for pharmaceuticals to overweight in a European equity strategy review, pointing out that the sector's price-to-earnings (P/E) ratio 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; signs the improvement in PMIs (purchasing managers' indexes) is leveling off; and some tactical trading indicators are close to extremes.

The broker cut its rating for metals and mining, noting the sector has been the second-biggest re-rater of the 30 European sectors, with its P/E multiple up 64 percent since October.

We downgrade the metals and 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.

Kazakh copper miner Kazakhmys was the second biggest FTSE 100 faller, down nearly 2.2 percent.

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.

Essar Energy and Cairn Energy , both of which are set to leave the index on March 16, following this week's reshuffle news, were among the biggest winners, bouncing 1.8 and 1.5 percent, respectively.

(Editing by Mark Potter)

(This story corrects final paragraph to show Essar and Cairn are set to leave the FTSE-100 on March 16 not March 12)