The leading share index was lower in early deals Friday, with weakness in banks and commodity issues the main drag on the final half-day trading session of 2011.

At 0849 GMT, the FTSE 100 <.FTSE> index was down 10.89 points, or 0.2 percent, at 5,555.88, having added 1.1 percent on Thursday. The market is set to close at 1230 GMT.

Thursday's gain helped put the blue chip index back in to positive territory for December, having been down 3.2 percent at one stage.

Overall, however, the FTSE 100 index is 6.5 percent lower on the year, having swung from a peak of 6,105.77 to a low of 4,791.01 over 12 months, with worries over the impact of the euro zone sovereign debt crisis doing much of the damage.

As traders say goodbye and probably good riddance to 2011, a year that saw most of the European and Asian indices recording double-digit losses, traders may not be so welcoming to 2012 either, said Jonathan Sudaria, a dealer at Capital Spreads, in a note.

The one bright spark to 2011 has been the resilience of the U.S. given the weak global economic backdrop. However, with the European debt crisis still outpacing policy makers' ability to curtail it and uncertainty over how China's slowdown will land, downside risks are already lining up for 2012, Sudaria added.

The euro zone's blue chip Euro STOXX 50 <.STOXX50E> index is set to record a loss of 18 percent on the year, hammered by fears of massive state defaults and writedowns.

German Finance Minister Wolfgang Schaeuble, however, said in an interview published in German newspaper Handelsblatt he expects the euro zone will be stabilised within 12 months and ruled out a breakup of the single currency.

Domestic banks were the biggest fallers in London, with part-state-owned lenders Royal Bank of Scotland and Lloyds Banking Group shedding 0.9 percent and 0.8 percent respectively, while Barclays lost 0.9 percent.

Integrated oils <.FTNMX0530> were mostly lower, with BP and Royal Dutch Shell both down 0.5 percent as crude prices <.CLc1> moved lower.

BG Group , however, bucked the sector trend, adding 1.4 percent to top the blue-chip leaderboard after its partner, Brazil's state-led oil company Petrobras
, declared that the Guara field in Brazil's Santos basin is commercially viable.


Specialty metals & miner <.FTNMX1770> fell back, with Rio Tinto down 0.3 percent. Copper was higher, although the base metal's price is still headed for its first annual drop in three years on demand fears.

China's vast factory sector shrank again in December as demand at home and abroad slackened, the HSBC Purchasing Manager's Index survey showed, reinforcing the case for pro-growth policies to underpin the world's second-largest economy.

But precious metals miners were among the top blue chip gainers, with Randgold Resources adding 0.5 percent.

On the second line, fashion firm Supergroup found support, up 1.5 percent, but elsewhere in the retail arena, under-pressure floorcoverings group Carpetright was the top FTSE 250 <.FTMC> faller, down 2.8 percent.

House prices in Britain dipped in December, mortgage lender Nationwide said Friday, adding that the property market looks likely to remain sluggish next year as a weak economy and rising unemployment keep a lid on consumer spending.

No other British economic data will be released Friday. December's ISM New York and Chicago PMI reports will be released after the London close, at 1330 GMT and 1445 GMT respectively.

(Editing by David Holmes)