British shares muted ahead of economic data; airlines skid

The blue-chip FTSE 100 index edged 0.1% lower, with British airways owner IAG shedding 1.2% after Britain removed Portugal from its quarantine-free travel list and added seven more countries to its red list. Other airlines including Ryanair Holdings, Wizz Air and EasyJet fell between 1% and 2.6%.

British shares struggled for direction on Friday as investors stayed away from making big bets ahead of domestic construction activity data and U.S. jobs numbers, while airline stocks came under pressure on further tightening of travel restrictions. The blue-chip FTSE 100 index edged 0.1% lower, with British airways owner IAG shedding 1.2% after Britain removed Portugal from its quarantine-free travel list and added seven more countries to its red list.

Other airlines including Ryanair Holdings, Wizz Air, and EasyJet fell between 1% and 2.6%. The domestically focused mid-cap FTSE 250 index was flat.

"There's not much in the way of negative or positive drivers at the moment. We're in a bit of a holding pattern until we get some clear idea of whether or not restrictions will be loosened further on June 21," said Michael Hewson, chief market analyst at CMC Markets in London. Asian shares tracked Wall Street lower as signs of a firming U.S. economy stoked worries about higher inflation and an earlier withdrawal of Federal Reserve stimulus.

"I don't think tapering of asset prices is anything to be worried about, it's a natural consequence of an economic rebound. The biggest concern at the moment is we're not going to get any significant idea of how transitory it's likely to be," Hewson said. After breaking above the 7,000 mark in mid-April, the FTSE 100 index has moved in a narrow range on worries that rapid economic growth could lead to higher inflation and faster tightening of ultra-loose monetary policies.

All eyes are now on the U.S. non-farm payrolls report for May due later in the day. Among other stocks, Reckitt Benckiser Group rose 0.9% and B&M European Value Retail added 1.9% after brokerages hiked their price targets.

Software company Sage Group fell 1.5% after Goldman Sachs offered to sell about 16 million shares at a discounted price.

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