FTSE falls ahead of GDP data

 @ibtimes on August 27 2010 8:09 AM

The top share index fell marginally early on Friday, as investors waited on the sidelines ahead of the second release of second-quarter GDP and a major speech by U.S. Federal Reserve Chairman Ben Bernanke.

By 8:52 a.m., the FTSE 100 <.FTSE> was down 10.04 points, or 0.2 percent, at 5,145.80, having closed up 0.9 percent at 5,155.84 in the previous session, rallying from a seven-week closing low on Wednesday.

London's blue chips echoed sentiment overnight on Wall Street, which closed down after initially rallying on better than expected jobs data as investors looked ahead to Bernanke's speech.

The Fed chairman, whose speech will be the keystone of a three-day conference of central bankers from around the world at Jackson Hole, Wyoming, is likely to signal his views about the uncertain prospects for the world's biggest economy but probably will not offer many clues on whether the U.S. central bank will pump more cash to keep the recovery going.

We're just going to probably do very little now at least until UK GDP -- there'll be a momentary glimpse at that and then it'll probably be waiting for the States this afternoon, Giles Watts, head of equities at City Index, said.

Tullow Oil was the top faller down 3.4 percent after two Ugandan newspapers said the Ugandan government has taken away the UK company's exploration licence.

Tullow Oil declined to comment.

They didn't renew their licence for the Kingfisher oilfield. Basically the Ugandans have repossessed the Kingfisher oilfield, Mic Mills, head of electronic trading at ETX Capital said.

Other energy stocks <.FTNMX0530> fell in tandem with crude prices, paring the previous session's gains, with BP continuing to ebb and flow, down 2.0 percent.

Banks <.FTNMX8350> were also weaker as risk appetite deserted investors, with Lloyds Banking Group the top faller in the sector, down 1.2 percent.

BA CLIMBS

In wafer thin trade moves were exacerbated with British Airways up as much as 1.6 percent after Spain's Iberia , its peer and potential merger partner, posted first-half results.

Iberia reported a narrower than expected first-half operating loss as improving business travel and air cargo demand eased the negative impact of a volcanic ash cloud in April.

We're just seeing light volumes ... But all eyes on the States and Bernanke later on this afternoon, City Index's Watts said.

National Grid rose 1.5 percent with traders citing a BofA Merrill Lynch note, in which the broker resumed its coverage on Britain's biggest utility with a buy rating.

Also featuring strongly on the upside were temporary power provider Aggreko up 1.2 percent, credit information company Experian rising 1.9 percent and testing equipment firm Intertek Group climbing 1.0 percent.

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