By Tricia Wright
LONDON (Reuters) - Britain's top share index was down 0.3 percent early on Friday as strength among banks and miners was offset by falling energy stocks with investors awaiting U.S. GDP data for further signs of economic recovery.
By 0816 GMT, the FTSE 100 was off 12.09 points at 4,619.52, having closed up 1.9 percent at a 7-month high on Thursday of 4,631.61 on reassuring company earnings.
"We're still pretty positive about the outlook -- I think the profits picture is continuing to get better rather than worse. I think there's still considerable valuation support left in the market. It has got more breadth over the last few weeks," said Darren Winder, head of macro and strategy research at Cazenove.
"I think the U.S. GDP figures today will be another confirmation that output fell a lot less in Q2 than it fell in Q1. We've seen that in the UK; I think we'll get confirmation of that for the U.S. later today, and I think we're going to see that in the other major economies," he said.
A Reuters poll of economists showed a median forecast of a 1.5 percent contraction in the U.S. economy in the second-quarter, on a seasonally adjusted annualised basis, compared with a 5.5 percent contraction recorded for the first quarter.
British consumer confidence held steady in July as a small deterioration in Britons' expectations of their own finances was offset by a more upbeat view of the economy as a whole, the GfK/NOP consumer confidence index showed.
Banks were the best performing sector on the index, rallying ahead of their first-half results next week.
Barclays and HSBC, which kick off with the reporting on Monday, gain 2.3 percent and 0.8 percent, respectively, while Lloyds Banking Group, scheduled to release its figures on Wednesday, adds 0.2 percent, and Royal Bank of Scotland, which reports on Friday, adds 0.6 percent.
Against a backdrop of rising metals prices, the mining sector enjoyed a rally.
BHP Billiton, Fresnillo, Kazakhmys, Lonmin and Rio Tinto gained 0.9-2.8 percent.
Vedanta Resources rose 0.6 percent despite saying first-quarter core earnings had more than halved after a sharp decline in metals prices.
Anglo American added 1.5 percent after posting a sharp fall in first-half profit and said it had achieved $450 million of its planned $2 billion in cost savings.
British Airways was the top FTSE gainer, up 5 percent as the airline said it had cut operating costs by around 6.6 percent since last October as it fights to slim down during the downturn, while its debt-pile also fell slightly to 2.3 billion pounds.
Reed Elsevier was also a top blue chip riser, rebounding after sharp falls Thursday when the Anglo-Dutch publisher ditched its 2009 earnings per share guidance and unveiled plans to issue new shares to pay down debt.
Reed was helped higher as Credit Suisse upgraded its stance on European media to "overweight" from "underweight".
Blue-chip peers Thomson Reuters and Pearson rose 0.3 percent and 0.7 percent, respectively.
Midcap media firm United Business Media jumped 8 percent as it said it was on track to meet 2009 targets after cutting costs to combat weakness in print and in its trade fairs business, and said forward bookings for major events were up.
Rexam which fell sharply after confirming rights issues plans on Thursday rise 1.5 percent with UBS lifting its recommendation on the drinks can maker to "buy" from "neutral".
Energy stocks were the biggest drag on the index, despite the crude price rising above $67 a barrel as investors chewed over a week of results from the majors.
BG Group, BP, Cairn Energy and Royal Dutch Shell fell 0.8-1.7 percent.