Miners dragged FTSE 100 lower on Friday, with Kazakhmys under pressure from brokers' downgrades, while banks buoyed up by central bank cash provided some support.

London's blue-chip index <.FTSE> was down 13.44 points, or 0.2 percent, at 5,917.81 by 12:10 p.m. Closing levels on the FTSE have been locked in tight range between 5,870 and 5,940 since mid-February.

Jeremy Batstone-Carr, strategist at Charles Stanley, said investors were beginning to focus on what happens once the liquidity support provided by central banks is withdrawn.

Although we have been up 20 percent in global equities and 15 percent from the FTSE 100 since October lows, we would be thinking about derisking, he said, adding he liked exposure to stocks offering reliable income such as drugmakers.

Integrated oil stocks fell, led mainly by Royal Dutch Shell after the company said its giant Ormen Lange field off Norway, which can provide about a fifth of Britain's gas demand, will be curtailed in May due to maintenance.

Miners erased the previous session's gains, with Kazakhmys the top FTSE faller, down 3.5 percent and extending the previous session's post-results decline, as both Numis Securities and Societe Generale downgraded their ratings for the mining group.

Numis said the medium-term outlook was lower than it had previously forecast, and costs remained under pressure, while Kazakhmys is trading at 16 times 2012 earnings, at the top of the mining pack.

Miners are up 13 percent in 2012, but traders said concerns are growing that labour costs and the high price of oil could erode margins.

In a global research note, HSBC said that if the high price of oil trend persists, a fragile economic recovery in the developed world could quickly be derailed and inflation could return to emerging markets, forcing governments to rethink their looser monetary policy, which is designed to keep alive growth.

FINANCIAL RISE

Financials including banks and fund managers were the top gainers as the huge liquidity injection from the European Central Bank this week has driven down fears of a collapse of the financial system and in turn reduced volatility <.VFTSE>, which led Goldman Sachs to upgrade its rating on European banks to overweight in a European strategy note.

Top gainer on the FTSE 100 was Man Group , up 3.5 percent and extending the previous session's post results gains, as calmer markets improved the outlook for the world's biggest listed hedge fund firm.

At some point during liquidity cycles, the performance baton is passed from risk (and beta) back to fundamental drivers such as earnings momentum, Citigroup said in a note, adding it believed equity markets could be roughly two-thirds through the current risk trade.

Bullish results helped lift IMI 1.8 percent after the British engineer reported a better-than-expected increase in 2011 profits, and said it was on track for further growth this year.

Elsewhere, electricity generator International Power climbed 2.3 percent in heavy trade, boosted by reheated talk that France's GDF Suez is set to table an offer for the 30 percent of the company it does not already own.

We believe speculation will mount on a GDF Suez buyout. We further believe any takeout would need a 20-30 percent premium to the current share price. We like International Power on fundamentals alone, but this would be the icing on the cake, Espirito Santo said in a note.

Also lifting sentiment, GDF Suez and International Power on Friday signed up for two Indonesian geothermal projects.

(Written by David Brett; Editing by Will Waterman)