The top share index held onto gains on Friday, largely thanks to integrated oils which were helped by a bullish note by Macquarie, as banks and miners wavered after U.S. jobs data drew a mixed reception.

London's blue chip index <.FTSE> closed up 25.42 points, or 0.5 percent at 5,649.68. Volumes were low as the FTSE 100 traded just 77 percent of its already weak 90-day average.

Integrated oils contributed around 15 points to the index gains. Investors turned to sector for it's defensive traits -- dividends and strong balance sheets -- and as a proxy for oil.

Macquarie Research said political risks in oil-producing regions are higher than economic risks in growth markets, and raised its 2012 price forecast for Brent crude by about a fifth to $116 per barrel.

The brokerage also raised its price target on several oil companies including Royal Dutch Shell , which gained 1.7 percent.

Crude was set to rise more than 5 percent in the first week of 2012, after Iran threatened to shut the Strait of Hormuz, the world's most important oil route.

Oil services firm Petrofac
was up 3.4 percent.

Heavyweight Vodafone rebounded 1.2 percent after falls on Thursday, as Goldman Sachs upgraded its rating to buy from neutral, anticipating U.S. venture Verizon Wireless would lift Vodafone's free cash flow above 10 billion pounds.

UK-listed ITV rose 2.7 percent, with traders saying the stock was being lifted by an upgrade to overweight from equal-weight from Morgan Stanley in broader note on the European media sector.

BSkyB , however, shed 1.3 percent with Morgan Stanley downgrading its rating to equal-weight from overweight, citing fears of poor newsflow from the satellite broadcaster.


U.S. employment growth accelerated last month and the jobless rate dropped to a near three-year low but traders said the figures weren't enough to convince investors the improvement could be maintained.

Even though the numbers are above expectations, they aren't enough to suggest a sustained recovery in the US economy, and they also make further QE less likely in the near term, Michael Hewson, analyst at CMC Markets, said.

Another London-based trader said the jobs data should be treated with caution as employment was somewhat concentrated in sectors (transportation, warehouse, bars and restaurants) that do a lot of seasonal hiring.

Riskier assets such as banks and miners pared gains as U.S. equities unexpectedly opened weaker, with traders saying the employment figures had been priced in to the market.

UK-listed asset managers such as Ashmore , Jupiter Fund Management and Man Group fell as much as 5.5 percent following cautious notes on the outlook for the sector from Credit Suisse, JPMorgan, RBC Capital Markets and UBS.

Food retailers were the among the worst blue-chip performers on a sector basis, led by Morrison Supermarkets down 1.5 percent and Tesco off 0.8 percent, on caution ahead of trading updates from both next week.

Luxury goods retailer Burberry , which is liked for its exposure to the China growth characteristics and is set for a trading update in 10 days, was the top FTSE 100 gainer, up 3.9 percent.

David Miller, a partner at Cheviot which has assets of 3.5 billion pounds under management, said: Whilst Europe is obviously at the forefront of investor's immediate concerns, the U.S. and China will make the difference this year.