FTSE retreats, miners fall on dollar surge

By Kit Rees and Alistair Smout

LONDON (Reuters) - The FTSE 100 retreated on Friday, weighed down by mining stocks that fell as the dollar surged following better-than-expected U.S. jobs data.

U.S. non-farm payrolls expanded by 271,000 in October, the largest rise since December 2014 and making a December Federal Reserve rate hike more likely.

"The U.S. dollar has surged across all the other currencies and all the commodities are denominated in dollars, so they’re going to drop," Jasper Lawler, market analyst at CMC Markets, said.

The blue chip FTSE 100 was down 0.2 percent at 6,353.83 points at the close, lagging European indexes.

Mining stocks were the top fallers, with Glencore falling 4.7 percent and Anglo American and Antofagasta down 1.7 percent and 0.3 percent respectively.

Another negative for the sector was Thursday's dam burst in Brazil at an iron ore mine owned by Vale and BHP Billiton, devastating a nearby town with mudslides and reportedly leaving scores dead or missing.

BHP Billiton shares fell 5.7 percent, trimming nearly 5 points off the FTSE 100.

Burberry was hit by weak earnings from Switzerland, where Richemont fell 5.7 percent after poorly received results that knocked back the luxury sector. Burberry fell 0.7 percent.

Among top risers, HSBC added 8.3 points to the index, rising 2.1 percent after the dollar rally.

"This particular move for the (U.S.) jobs number is very positive for the net interest margins of some of the bigger banks, and HSBC will be one of the greater weighted stocks on the FTSE," Brenda Kelly, head analyst at London Capital Group, said.

Earnings reports boosted shares in British Airways owner IAG, which rose 3.7 percent after lifting its long-term guidance, while Inmarsat rose 3.2 percent after its results.

Intercontinental Hotels Group was the top gainer, up 6.2 percent after saying that it was exploring strategic options including a potential sale or merger.

Building company CRH was up 3.6 percent after UBS upgraded the construction sector to "overweight", naming CRH as a preferred pick.

Outside the blue chips, interdealer broker Tullet Prebon recovered to trade up over 9 percent after saying that it was in talks with ICAP regarding the possible acquisition of ICAP's global broking business.

The company had opened sharply lower earlier in the trading session after it said that it expected a decrease in full-year underlying operating profit margin.

(Editing by Andrew Heavens)