The top shares fell on Friday, extending losses from the previous session when Germany's opposition to the creation of euro zone bonds sapped investor confidence, although some traders said a bounce off lows may be on the cards.

Severn Trent was among the day's biggest casualties, off 3.2 percent, after the water company reported a slightly bigger-than-expected drop in underlying pretax profit, reflecting increased investment in water networks and challenging conditions at its water treatment division.

Our full-year figures already indicate a fall in PBT (pretax profit) and EPS, so we do not foresee downgrades, Investec Securities said in a note.

We continue to like the shares, but, in the short term, we see United Utilities as the better value option of the two big Waters.

United Utilities shed 0.3 percent.

The UK benchmark posted its ninth successive day of falls on Thursday when German Chancellor Angela Merkel quashed market hopes that Europe's paymaster would open the door to the launch of joint euro zone bonds or a quantitative easing programme by the European Central Bank.

Investor sentiment remained at a low ebb on Friday. Sharp falls were seen from cyclical stocks, with miners <.FTNMX1770> and banks <.FTNMX8350> knocking the most points off the FTSE 100 index.

Germany's seeming intransigence on increased ECB intervention in the debt crisis brings more uncertainty to a fragile market, and with volumes low over the U.S. (Thanksgiving) holiday there is little direction, Mic Mills, head of electronic trading at ETX Capital, said.

The UK benchmark <.FTSE> had fallen 35.25 points, or 0.7 percent, to 5,092.32 by 0932 GMT, having slipped 0.2 percent in the previous session.

In the last nine days Britain's blue-chip index has dropped 7.5 percent, and seen its longest losing streak since 2003. As the index hovers around the 5,000-5,100 levels, some traders see buying opportunities.

Atif Latif, director of equities and derivatives at Guardian Stockbrokers, noted the unwinding of some short positions since the start of the FTSE 100's sell-off from its end-October peak of 5,713 to current levels.

Put volume has decreased since the start of the week and now buying in longer dated call options gives the impression that from these levels upside risk remains, Latif said.

Some market participants painted a less positive picture.

The global economy really seems to be slowing so a year-end rally is getting less and less likely, said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million of assets.

It's pretty quiet out there today with the U.S. equity markets open for only half a day after Thanksgiving. Black Friday retail sales in the U.S. today will be very important after aggressive discounting this year.

(Additional reporting by David Brett; Editing by Jon Loades-Carter)