FTSE inches higher as oils rise, miners fall

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Britain's top share index inched higher on Friday, with strength in heavyweight oils and pharmaceutical stocks just outweighing weakness in miners.

At 0823 GMT, the FTSE 100 was up 2.74 points at 5,157.38 after it closed 45.74 points or 0.9 percent higher on Thursday.

"It doesn't seem as if there is anyone brave enough to stand in front of the market at the moment," said Manus Cranny, head of sales at spreadbetter MF Global, after shares opened lower as expected.

Energy stocks provided the main prop for blue chips early on.

BP gained 0.4 percent as BofA Merrill Lynch upped its target price to 550 pence from 515 pence, BG Group rose 1.1 percent, and Royal Dutch Shell added 0.7 percent.

The Canadian and Alberta governments have promised C$865 million ($823 million) to help the Royal Dutch Shell develop carbon capture and storage at its oil sands processing plant as they seek to meet goals to cut emissions and curb global warming.

Crude prices held above $71 a barrel but trimmed some of the 3 percent gains made in the previous session as the U.S. dollar strengthened against a basket of currencies following comments from U.S. Federal Reserve chairman Ben Bernanke.

He indicated U.S. monetary policy might have to be tightened as a recovery takes hold, helping to pull the greenback off 14-month lows against a basket of currencies.

Pharmaceuticals were again among the top picks on the UK index, with AstraZeneca and GlaxoSmithKline extending recent gains, both up 0.4 percent, while Shire, which missed out on Thursday's rally, added 0.6 percent.

Among individual risers, Intercontinental Hotels and Whitbread were 1.8 and 4.1 percent higher respectively on the back of strong Q3 results from U.S. peer Marriott International. Whitbread was also helped by a Barclays Capital upgrade to "overweight".

MINERS STRENGTH WANES

Miners took the most points off the UK index, as metals prices eased as the dollar strengthened, with gold dipping below $1,045 an ounce, having almost touched $1,060 during the previous session.

BHP Billiton, Lonmin, Fresnillo, Xstrata, Kazakhmys, Rio Tinto and Randgold Resources fell 0.1 to 0.9 percent.

Banks were mainly lower, shedding some of the previous session's advance although gains by heavyweight HSBC, up 0.6 percent, kept the overall sector positive.

Lloyds Banking Group and RBS were down 1.6 and 0.3 percent respectively, as the Financial Times said the British government is to start examining their loan pricing mechanisms, suspecting that they are pricing loans to small and medium-sized businesses at levels which are unaffordable for most smaller institutions.

Standard Chartered was down 0.5 percent, while Barclays was flat.

On the economic front, UK input costs and "factory gate" inflation will be a focus on Friday, with September producer price inflation (PPI) numbers due for release at 0830 GMT.

UK PPI input prices are seen down 0.8 percent month-on-month in September, after a 2.2 percent rise in August, with PPI output numbers seen up 0.1 percent in September after a 0.2 percent rise the previous month.

UK August trade balance numbers will also be released at 0830 GMT and U.S. August trade figures are also due on Friday.

Next week sees a swathe of U.S. companies reporting, including General Electric, Intel Corp, JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs and Bank of America Corp.