By Dominic Lau
LONDON (Reuters) - The leading share index ticked up early Friday as Barclays led banks higher on reports it was in talks to sell its asset management business BGI, but oil producers and drugmakers slipped.
By 8:37 a.m., the FTSE 100 was up 8.01 points, or 0.2 percent at 4,370.59, after rising 0.7 percent Thursday to snap a three-day losing run.
The UK benchmark is down 1.5 percent for the year but has rallied 26 percent since hitting a six-year low on March 9.
"It's going to be a push and pull between the bears and the bulls at these levels. We have a few bits of worrisome data this week after a long stream of not-so-bad bits. That has slightly rattled the bulls," said David Morrison, market strategist at GFT Global Markets.
"The question is, is this going to develop something more serious in terms of a pullback? ... It's going to be quite a tussle between the two sides."
Barclays surged 8.1 percent after a source familiar with the matter said the lender was in talks to sell its asset management arm, Barclays Global Investors.
The Financial Times reported that Barclays was in talks to sell the business for up to $10 billion to potential bidders including U.S. money manager BlackRock.
Barclays and BlackRock declined to comment.
"Selling off an asset like that rather makes you worry what might be beneath the bonnet," Morrison said.
Within the banking sector, HSBC, Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered advanced 1.2 percent to 5.6 percent. Investors also looked ahead to U.S. consumer prices for April, due at 1230 GMT (1:30 p.m. British time), and industrial production data, due at 1315 GMT, which will provide a further gauge to the state of the world's largest economy.
Japanese machinery orders fell in March, showing companies remained reluctant to spend despite signs that recession may have hit bottom.
Rio Tinto gained 1.6 percent after the miner said it remained committed to a planned $19.5 billion tie-up with Chinese metals firm Chinalco, responding to talk that the deal may be revised to let more shareholders take part in a rights issue.
Within the sector, BHP Billiton, Anglo American, Xstrata, Kazakhmys, Lonmin and Antofagasta put on between 0.9 percent and 2 percent.
Oil producers were the top sectoral loser as crude prices were flat. BP and Royal Dutch Shell slipped 0.8 percent and 0.9 percent, respectively.
Drugmakers also retreated, with AstraZeneca losing 0.6 percent, GlaxoSmithKline down 0.9 percent and Shire off 1.3 percent.
Engineer Invensys rose 3.8 percent, extending Thursday's 13 percent rise after beating expectations on operating profit and resuming the payment of a final dividend.
Both JPMorgan and Citigroup Friday raised their price targets on the stock.
Thomas Cook shed 1.9 percent after losing 7.3 percent in the previous session. Its parent Arcandor was set to ask the German government for up to 700 million euros (625 million pounds) in loan guarantees, financial sources close to the matter said on Thursday.
(editing by John Stonestreet)