Britain's FTSE dips on Ukraine nerves; RBS outperforms

By Francesco Canepa LONDON (Reuters) - Britain's main equity index closed lower on Friday as new tensions between Russia and Ukraine and falls on Wall Street led traders to cash in on their weekly gains just before the close. The FTSE 100 closed 29.91 points, or 0.4 percent lower, at 6,791.55 points, erasing nearly half its weekly gains in the last hour of trading after Russia accused Ukraine of having shelled across the border. U.S. indexes also fell, partly weighed down by weak results from online retailer Amazon and a revenue warning from the world's largest credit and debit card company, Visa. Investors were reluctant to hold on to their long positions into the weekend as the geopolitical landscape remains uncertain. "There's uncertainty out there in Ukraine and the market had a bit of an exit move," Mark Priest, a senior trader at ETX Capital, said. BSkyB was the heaviest faller on the FTSE, sliding 5.5 percent, after the company placed shares representing nearly 10 percent of its capital to finance part of its acquisition of Sky Deutschland and Sky Italia. Shares in RBS, however, surged 10.8 percent, their biggest rise in four years, after the bank posted a surprise pretax profit for the second quarter, citing an economic upturn that allowed it to write back losses that had been booked on bad loans. Fellow British-focused lenders Barclays and Lloyds Banking Group, which are due to report next week, were up more than 1 percent. "Credit quality keeps improving, especially in distressed assets such as commercial real estate," said Espirito Santo analyst Shailesh Raikundlia, who has a "neutral" recommendation on the stock. "In general, the credit environment is pretty benign and that should come through in banks' results." The positive mood on the British economy was underpinned by data showing economic output in the second quarter finally topped levels seen before the financial crisis struck six years ago. Network operator Vodafone added 4.4 points to the FTSE as it rose 2.1 percent after saying its performance had begun to stabilise in several European markets. Pegging back the index were export-oriented companies such as heavyweight drugs firm GlaxoSmithKline and fashion brand Burberry. GSK knocked 8.9 points off the index as it faced new allegations of corruption, this time in Syria, where the drugmaker and its distributor have been accused of paying bribes to secure business, according to a whistleblower's email. Burberry fell 1.6 percent after French luxury goods group LVMH posted below-forecast second-quarter sales and profits, hit by a drop in demand from China. (Additional reporting by Lionel Laurent; Editing by Susan Fenton)