FTSE Ticks Higher On Oils Before U.S. Jobs Data

Britain's top share index ticked higher in early Friday trade ahead of U.S. jobs data, as gains in heavyweight energy stocks offset weakness in insurers on concerns over Aviva's capital strength.

By 0846 GMT, the FTSE 100 was up 5.9 points, or 0.2 percent, at 3,534.86 in choppy trade, after tumbling 3.2 percent on Thursday. The UK benchmark index is down 20 percent so far this year after sliding more than 31 percent in 2008.

Energy stocks rebounded on firmer crude prices. BP, Royal Dutch Shell and Tullow Oil put on 0.5 percent to 1.1 percent.

Higher base metal prices also lifted mining stocks, with BHP Billiton, Rio Tinto, Anglo American and Eurasian Natural Resources up between 0.5 percent and 2.3 percent.

"Trading conditions would remain neurotic... (until the U.S. jobs data), when I think everybody will lose their breath when something approaching 700,000 jobs will have been lost in the month of February," said David Buik, senior strategist at BGC Partners.

U.S. non-farm payrolls data is due at 1330 GMT. Economists polled by Reuters expect the payrolls report will show the world's largest economy shed 648,000 jobs in February and that the unemployment rate rose to 7.9 percent.

Aviva shed 3.4 percent, extending the previous session's 33 percent drop as analysts cited concerns over the group's capital strength.

Peers Old Mutual, Friends Provident, Standard Life and Prudential sagged 0.9 percent to 3.1 percent. BT Group eased 1.6 percent after Morgan Stanley downgraded the stock to "underweight" and ING trimmed its price target on the fixed-line operator.

Banks were mixed, with Lloyds Banking Group and Standard Chartered up. But HSBC, Barclays and Royal Bank of Scotland slipped.

Lloyds said late on Thursday that talks between the bank and the British government over the bank's participation in the toxic asset insurance scheme are still ongoing.

WPP Group put on 5.5 percent after the world's second biggest advertising group posted 2008 like-for-like revenue growth of 2.7 percent slightly missing targets, and revised its 2009 forecasts down to a drop of 2 percent.

Wolseley shed 6.9 percent after the building materials group said it would raise over 1 billion pounds by placing shares with institutional investors and through an 11-for-five rights issue.

Morgan Stanley said it forecast UK corporate profits to fall 60 percent peak-to-trough and assumed no growth in 2010.

"While this sounds a rather draconian and hyperbolic downgrade, we believe it is realistic and incorporates the big losses that have come to light in the banking sector as well as a sharp drop in commodity prices," the broker said in a note.

It added that it had revised its 12-month target for the FTSE 100 to 3,500 from its previous target of 4,300.