LONDON The FTSE 100 edged lower on Friday, failing to hold onto two-month highs in the face of weaker-than-expected U.S. job creation and as William Hill and RBS were hit by profit-taking after results.
The United States - where British blue-chips make around a fifth of their revenues - added 162,000 new jobs in July, some 22,000 less than forecast, keenly-watched data showed on Friday, fuelling concerns about its economic recovery.
That news, alongside some unspectacular results from British corporates, prompted investors to take profits at the end of a strong week. The FTSE 100 closed down 34.11 points, or 0.5 percent, at 6,647.87 points, retreating from an intra-day two-month high of 6,696.63.
"The FTSE has given back gains after four days following a fairly mixed U.S. employment report ... It is a bit of profit-taking," said Myrto Sokou, analyst at Sucden Financial.
The retreat took the index out of overbought territory on the 7-day relative strength index (RSI), which it reached on Thursday, but was not significant enough to prevent it from posting a gain on the week, at 1.4 percent.
William Hill was the biggest victim of the profit-taking. After rallying more than 50 percent this year to record highs, shares in the bookmaker slumped 7.3 percent on Friday following in-line results.
"The weakness today seems to be profit taking given the move into numbers today. Overall we see the weakness today as a short-term reaction and expect the price to move back to fair value at 5 pounds," said Atif Latif, trader at Guardian Stockbrokers.
Part-nationalised Royal Bank of Scotland also weakened, down 3.3 percent, with analysts noting weakness in its trading revenues and core operating profit.
By contrast, airline group IAG rallied 6.7 percent after swinging to profit in the second quarter thanks to early signs of improvement at its Spanish carrier Iberia.
"It has been a bit of a mixed bag (on earnings) but it's all about expectations. IAG still posted a first-half loss, but maybe the worst is over and that's why you are seeing a move higher. Contrastingly with RBS, the worst isn't over," said Michael Hewson, analyst at CMC Markets.
(Editing by Stephen Nisbet)