Britain's FTSE slips back after rally

* FTSE 100 down 0.1 percent after gains Thursday

* Engineers depressed by another profit warning

* Banks higher awaiting results from U.S. peers

By Jon Hopkins

LONDON, Oct 12 (Reuters) - Britain's top shares were loweron Friday, slipping back after a strong rise the previoussession as investors' focus turned back to concerns about globalgrowth and corporate earnings.

Engineering firms made up some of the biggest fallers afteryet another profit warning from the sector, with mid-cap MorganCrucible

the latest to voice caution, hot on the heelsof Cooksonat the start of the week.

Morgan Crucible shares dropped 12.3 percent, topping theFTSE 250

fallers list, after it said its full-yearperformance was likely to be materially below its previousexpectations.

In response, Oriel Securities downgraded its rating forMorgan Crucible to "hold" from "buy"

The bad news weighed on GKN, the top blue chipfaller down 3.4 percent, while engineering peers IMI,Melrose, Weir Groupand Bodycoteallsuffered as well.

"Following on from Cookson, it will be a case of spottingthe next warning. IMI and Bodycote will top many lists but thelack of a Chinese/Asian exposure will be a plus - much of Morganand Cookson is the lack of an H2 pick up the region," Orielsaid.

At 0810 GMT, the FTSE 100

index was down 7.61points, or 0.1 percent, at 5,822.13 points, after a fall in U.S.weekly jobless claims enabled the index to gain 0.9 percent onThursday to snap a run of three consecutive sessions of losses.

"After Thursday's rally, a slip back was always likely on aquiet Friday, with the bounce back mainly having been ashort-squeeze in low volume, but it is encouraging that the5,800 level is holding," said Mike Mason, senior trader atSucden Financial Private Clients.


were the strongest blue chip performers,up 0.7 percent, extending the previous session's rally asinvestors awaited results from both JPMorgan Chase & Co.

and Wells Fargo

, as the U.S. sector's third-quarterreporting season gets under way on Friday.

Financial services firm Hargreaves Lansdown

was thetop FTSE 100 gainer, up 2.8 percent as it said its assets underadministration increased by 2.2 billion pounds in the threemonths to Sept. 30 to 28.5 billion pounds.

"We increase our ahead of consensus pre-tax profit forecastby 5 percent this year, our target price is raised to 650 pencefrom 587 pence. Our recommendation remains 'Hold', only due tothe warranted substantial premium valuation," Numis Securitiessaid in a note on Hargreaves Lansdown.


rose 0.3 percent but remain volatile asinvestors await China's trade data due at the weekend to gaugethe economic health of the world's top metals consumer, withexpectations continuing of stimulus measures from the country.

Chilean copper miner Antofagasta

, however, missedout on the sector gains, losing 1.3 percent with traders citingthe impact of a downgrade to the stock by HSBC Securities to"underweight".

Technical analysis of the FTSE 100 remained cautious.

"Based on the short-term range of 5,885.60 to 5,766.69,traders should watch for a rally to 5,826.15-5,840.18 to attractfresh selling pressure. If the market does turn lower aftertesting this zone then look for the start of a steep break,"said James A. Hyerczyk, analyst at Autochartist.

(Editing by Hugh Lawson)


Messaging: jon.hopkins.thomsonreuters.com@reuters.net))


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