FTSE flat on Christmas Eve

The top share index was flat in early deals on Thursday, unable to extend the week's rally into a fourth straight session with Scrooge-like volumes ahead of the Christmas break.

At 8:49 a.m. British time, the FTSE 100 index was 1.09 points higher at 5,373.47. The UK blue chip index closed 43.72 points, or 0.8 percent higher on Wednesday at 5,372.38, its highest closing level in more than five weeks.

"With the FTSE getting within 10 points of its 2009 high it's been a good few weeks for the index. Whether momentum can be maintained in 2010 is a tougher question" said Manoj Ladwa, senior trader at ETX Capital.

The FTSE 100 has rallied 55 percent since hitting a floor in early March, and is up 21 percent for the year, on track for its best yearly gains since 1997. Last year, the index lost more than 31 percent.

Miners were in demand as metal prices rose. Gold spiked above $1,100 per ounce as a recent drop to seven-week lows spurred some bargain hunting in a holiday-thinned market.

Silver miner Fresnillo was the top FTSE 100 gainer, up 1.8 percent, while Randgold Resources, Anglo American, Kazakhmys and BHP Billiton gained 0.2 to 0.5 percent.

Retail issues got a boost on hopes for a pre-Christmas rush on the high street, with blue chips Next, Kingfisher and Home Retail Group up 0.3 to 0.8 percent.

Among the mid caps, Carphone Warehouse was a top performer, up 5.8 percent on hopes for mobile phone sales. 

Beverages gained on Christmas sales hopes and on reports of moves to create a drinks giant in Japan, with Diageo up 0.6 percent and brewer SABMiller ahead 0.2 percent.

Japan's Kirin Holdings and Suntory Holdings SUNTH.UL are aiming to combine their operations in the spring of 2011 to create one of the world's largest food and beverage firms, the Nikkei business daily said.

BANKS EASIER

Banks slipped back as the sector's recent rally faded, weighed down by weakness in heavyweight HSBC, off 0.6 percent, and Standard Chartered, down 0.7 percent.

But Royal Bank of Scotland, Lloyds Banking Group and Barclays took on 0.1 to 0.4 percent.

RBS is closing in on a sale of its asset management arm in a deal said to be worth 30 billion pounds, with Aberdeen Asset Management believed to be the front runner to buy the business, the Daily Express said.

Aberdeen Asset shares shed 1.1 percent.

Energy issues were easier as crude consolidated around $77 a barrel after surging more than 3 percent the previous day on a deeper-than-forecast drop in crude and fuel stocks in the world's top energy consumer.

BG Group and Royal Dutch Shell lost 0.1 and 0.2 percent, respectively, though BP gained 0.3 percent. 

No important domestic economic data is due for release on Thursday, and the U.S. data of interest will be released after the London market's close, with November durable goods orders and the latest weekly jobless claims numbers due at 1:30 p.m. British time.

London equity markets close at 12:30 p.m. British time on Thursday and reopen on Tuesday December 29.