By Tricia Wright

LONDON (Reuters) – Britain’s top shares fell on Friday, weighed down by spirits company Diageo on bearish analyst comments.

The company’s shares fell 1.7 percent, one of the biggest drags on the FTSE 100, as various investment houses including Goldman Sachs weighed in on the company a day after it said its revenues were impacted by emerging market weakness.

Goldman Sachs removed Diageo from its Conviction List and downgraded its rating on the stock to “neutral”.

“We expect the softer performance in 1H to continue into 2H and see potential for continued EM challenges in FY15,” the investment bank wrote in a note.

BT, meanwhile, rose 2.9 percent, topping the FTSE 100 leader board, after it returned to quarterly revenue growth for the first time in four and a half years, driven by record customer demand for superfast broadband and its growing new sports TV service.

“For me, the figures are impressive, especially given the growth comes from an area which was new territory for BT, namely BT sport,” said Jordan Hiscott, sales trader at Gekko Global Markets.

“The shares have had an impressive run… even so, this morning I have real money accounts increasing positions from previously held longs,” he added.

The FTSE 100 was down 24.70 points, or 0.4 percent, at 6,513.75 points by 0928 GMT, having edged 0.1 percent lower on Thursday following a torrid few sessions in which the index dropped more than 4 percent, putting it on course to record a loss of around 3 percent for January.

After an encouraging start to the year, which saw the UK benchmark post gains in the first two weeks, equity markets took a turn for the worse as unease about slowing Chinese growth and the withdrawal of U.S. monetary stimulus spread from emerging market currencies to the world’s big stock markets.

While the situation in emerging markets is still fragile, even after some central banks took action to try to prop up tumbling currencies, markets are starting to stabilise.

Wall Street saw good gains overnight as social media company Facebook led a tech rally after delivering its strongest revenue growth in two years, beating analysts’ estimates.

Investors take a keen interest in U.S. earnings, where the reporting season is at a more advanced stage than our own, given that around a quarter of UK companies’ revenues come from the United States.

“I think possibly what’s starting to come into investors’ consciousness is that some of these corporate results that we’re seeing from the fourth-quarter (U.S.) reporting season are actually stronger than had been feared and that’s one of the building blocks for any progress (in) the market,” Richard Hunter, head of equities at Hargreaves Lansdown, said.

“It gives some… vindication to what the Fed’s done in its further taper (scaling back of stimulus).”

Of the 23 percent of S&P 500 firms to have reported, 63 percent have met or beaten on revenue, while 72 percent have met or beaten on earnings, Thomson Reuters Starmine showed.

(Reporting by Tricia Wright; Editing by Mike Collett-White)