FTSE down as stressed investors await bank test resul

Britain's top share index pared losses on Friday, helped by a short-squeeze in banking stocks ahead of European stress test results and earnings from Citigroup in the U.S., according to Reuters. London's blue-chip index was down 3.77 points, or 0.1 percent, to 5,843.18 by 1102 GMT, with its weekly fall standing at 2.5 percent. Banks moved into positive territory with traders citing low volumes and the recent pullback in the shares as offering a 'trading opportunity', but any strength was seen as short-lived. The sector has fallen 2.7 percent this week on concerns over European debt contagion. The European Banking Authority is set to publish results of tests on 90 banks from across the European Union at 1600 GMT. The data will also reveal sovereign debt holdings, leaving plenty for investors to ponder. 'There is mounting concern in Europe about this second and more granular bank stress testing,' Stefan Angele, head of investment management at Swiss & Global Asset Management, which has around 80 billion Swiss francs ($95 billion) of funds under management. '(The test) is supposed to build broader market confidence by clearly isolating and identifying weak spots in the financial system. Amid the current mood, it could worsen the sovereign debt crisis in the euro zone and encourage even more speculation against financial institutions.' Ahead of the stress test results, Citigroup will continue the U.S. banking sector's reporting season at 1200 GMT, following on from JP Morgan Chase's second-quarter earnings beat on Thursday. Concerns the health of the world's biggest economy remained a prohibitive factor for investors. Standard & Poor's joined Moody's rating agency in its downbeat assessment of the U.S. economy, while Fed Chairman Ben Bernanke backed off hints additional near-term stimulus could be on the way. Wall Street stock index futures pointed to a mixed start for U.S. equities on Friday, as doubts over the strength of the economic recovery were was offset by some decent corporate results. Google Inc reported adjusted quarterly earnings that exceeded Wall Street's most bullish forecasts. 'If corporate earnings continue, on both sides of the pond, to exceed expectations, as they have for the last few quarters, at least there will be some proof that corporate health is improving. On that basis it could give the market a bit of a kick start,' said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. With both Europe and the United States staring down the barrel of an economic storm, however, appetite for commodity-related assets declined, with miners and integrated oils topping the list of fallers as worries grew over the demand outlook for raw materials. Global miner BHP Billiton fell 2.0 percent after it swooped for U.S. gas producer Petrohawk Energy Corp in a $12.1 billion deal. Meanwhile, precious metals miner Fresnillo rose 2.5 percent as JP Morgan upgraded its rating on the firm to 'overweight' after the company's second quarter production update on Thursday, and at a time when the gold price is at a life-time high. BSkyB added 1.6 percent as Rebekah Brooks, most senior newspaper executive in Britain, resigned as chief executive of News International, yielding to political and investor pressure over a phone hacking scandal undermining Rupert Murdoch's media empire on both sides of the Atlantic. BSkyB's shares had dropped 18 percent over the past week and a half amid controversy over Murdoch's News Corp's bid for the British Satellite broadcaster, ultimately abandoned in the wake of the scandal. Deutsche Bank resumed coverage on BSkyB with a 'buy' rating and 850 pence target.