9:30AM London trades flat at mid-day, awaiting U.S. job data.
The FTSE 100 in London lost 13.00 points, or 0.22% at 5,991.50 at 2:00 pm GMT.

In focus

Manufacturing output grew for the fourth month in a row in August, pushing up the annual rate of increase from 1% in July to 1.5% and maintaining the steady growth of output in the sector.

Advancers

Severn Trent stood out with a gain of 2.44%, as M&A fever again descended upon the utilities sector after a recommended 1.62 bln stg bid for Viridian, which spurted 7.94%. PartyGaming remained the top advancers, however, bouncing back 6.17% from the plunge this week, as a smattering of hopeful press comment reassured investors that the end may not yet be nigh for the online gaming sector.

Specialty pharma group Shire was also in demand, rising almost 1% after the company said it expects to know today whether the US medicine regulator has granted marketing approval for its new drug to treat hyperactivity.

Decliners

On the downside, Vodafone down 1.19%, led the decline, hit by a Deutsche Bank downgrade to hold from buy. The broker cited worries over fundamentals and valuation grounds.

Corus also slid 3-1/4 pence lower as investors took profits following the share price jump yesterday on the back of Tata Steel confirmation that it is evaluating opportunities including a possible approach for the Anglo-Dutch firm.

7:30AM Japanese stocks edged lower on Friday on profit-taking.
Asian markets closed mixed. The Nikkei 225 Average clsoed 0.08% lower at 16436.06. Tech names were lower after a three-week winning streak, as Canon fell 1.2%. Nippon Steel advanced 1.2% as news that Tata Steel was considering a $10 billion bid for Corus Group gave a boost to prospects of more consolidation in the steel sector and lifted steel shares higher. Inpex Holdings added 1.8%, despite worries it may lose part of its stake in Azadegan in Iran oil field. Large financial stocks were notable advancers, as Mizuho Financial Group gained 2% while Nomura Holdings rose 3.3%.

The Hang Seng Index in Hong Kong slipped 0.02% to close at 17903.39. New World Development, which gained 2.6%, was one of the biggest blue-chip advancers. China-related firms fell following big rises recently. China Mobile fell 1.2% after hitting an all-time closing high Wednesday.

Australia S&P/ASX 200 closed 0.03% higher at 5220.70. Minara Resources surged 5.8% after reporting record nickel production for the third quarter. Queensland Gas jumped 4% on hopes of counter offers to the bid launched Thursday by Santos.

6:30AM Airline gains counter telecom sector weakness in Europe.
European markets were slightly higher by mid-morning on Friday. The FTSE 100 in London reached 6,006.6, Frankfurt Xetra Dax was up 0.1% at 6,083.12, and the CAC 40 in Paris was fractionally higher at 5,289.52.

M&A

Ryanair late on Thursday launched a surprise bid for Aer Lingus, valuing the company at 1.48 billion euros. The board of Aer Lingus rejected the offer saying it undervalued the long-term growth potential of the company.

Advancers

Shares in Ryanair added 1.5%, while Aer Lingus gained 1.7%. EasyJet''s shares rose 2.2% after lifting its profit forecast following a September passenger traffic rise of 9.8%.

European banks enjoyed another session of M&A rumour-driven gains as Banesto in Spain jumped 6.4% on talk of a bid from domestic rival Santander.

Decliners

Mobile and fixed-line telecom stocks were on the wane after Deutsche Bank made downgrades in each sector. Telecom Italia fell 1.1% after it was cut from buy to hold and had its target price lowered. Meanwhile, Vodafone, the UK mobile operator, fell 1.4% after Deutsche lowered its rating from buy to hold and its target price.