Miners led Britain's top share index lower early on Friday, after weak trade data from China and anxiety over Greece's austerity deal clouded the outlook in the sector and weighed on investors' sentiment.

London's blue chip index <.FTSE> fell 20.24 points, or 0.3 percent at 5,875.23 by 0908 GMT.

The fall erased the previous session's 0.2 percent gain as technical analysts said a recent plateau reached near the 5,910 level was a sign that investors were backing away from buying strength as Greece's debt negotiations dragged on, and a correction could be needed to tempt buyers back into this market.

Concerns that Greece will not do enough to trigger a second EU bailout remained, as euro zone finance ministers demanded more steps and a parliamentary seal of approval before providing the aid.

In a sign of market unease over the situation, Greek CDS -- the insurance investors take out on the country's bonds to cover them in the event that Greece cannot repay the money -- has been rising over the past week.

We're creeping closer to that mid-February deadline for Greece's deal to be ratified and frustration is building, leading to caution and uncertainty among investors, a London-based trader said.

Miners <.FTNMX1770>, which had risen as much as 22 percent in 2012, have fallen 4.8 percent over the last five days as a string of mixed updates from the likes of Rio Tinto and macro worries have weighed on the sector.

Those mixed results continued as Anglo American fell 2.5 percent as diamond producer De Beers, of which Anglo owns 45 percent, reported a dip in annual production and said it expected to continue to rein in output growth in 2012.

Growth in China, the world's most voracious consumer of raw materials, remains a worry for investors and data from the country, which showed crumbling imports for January, stoked fears of a slowdown in demand.

Those figures also prompted Brent crude to slip from a six-month high on Friday, which led to a fall in integrated oil <.FTNMX0530> firms.

UBS urged investors to buy risk assets on the dips, with equities set to extend their recent rally provided the euro zone situation does not spiral out of control and global economic growth remains on a recovery path.

With risk appetite on the wane given the macro concerns, banks <.FTNMX08350> were mainly lower, although Barclays bucked the softer trend, up 3.0 percent albeit in choppy trade, as it reported mixed results.

The UK lender reported fourth-quarter pretax profit of 5.9 billion pounds, but warned it may miss its medium-term profitability target after it ended 2011 with its worst quarter for three years as the euro zone debt crisis hit bond trading.

Investors are for the moment giving the bank the benefit of the doubt as a recovery play, such that on reflection the general market view of the shares as a buy should remain intact, Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said.

European fourth-quarter earnings reports from the STOXX Europe 600 <.STOXX> are finely balanced, with energy firms posting the biggest positive surprise so far and financials lagging expectations by the biggest margin, Thomson Reuters StarMine data to the Thursday close shows.


For those looking for exposure to diversified financials in the face of global macro uncertainty, Goldman Sachs recommended UK asset managers over market structure companies as the latter segment is set to suffer from the consequences of continued bank deleveraging and tougher regulation.

Accordingly, the broker downgraded inter-dealer broker Icap to neutral from buy - contributing to a 2.7 percent fall in the shares, while it upgraded asset manager Schroders to buy from neutral.

Regulatory uncertainty led JPMorgan to downgrade Britain's biggest energy distributor National Grid , which shed 2.3 percent, to neutral from overweight.

On the upside, fashion retailer Next rose 1.4 percent as Deutsche bank raised its rating on the firm to buy from hold.

We expect some of the challenging conditions of 2011 - rising cost inflation and markdown - to moderate in 2012, Deutsche Bank said.

At the same time, less space is being added in the industry and the online channel continues to grow rapidly. In this context strong brands should be able to drive profit growth despite the fragility of the European consumer, it said.

A price target upgrade for drinks firm Diageo after results on Thursday by Nomura helped its shares 0.8 percent higher, while other perceived defensive stocks such as Reckitt Benckiser , up 0.5 percent, rose as risk appetite among investors faded.

(Writing by David Brett; Editing by Mike Nesbit)