Reuters: Hot Stocks: Britain's FTSE slips on U.S. budget uncertainty

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Britain's FTSE slips on U.S. budget uncertainty Dec 28th 2012, 12:03 Fri Dec 28, 2012 7:03am EST * FTSE down 0.4 pct at 5,932.17 points * Uncertainty over U.S. "fiscal cliff" weighs on market * Investors still expect U.S. fiscal deal * Many traders bullish on FTSE's prospects for 2013 By Sudip Kar-Gupta LONDON, Dec 28 (Reuters) - Britain's benchmark share index slipped on Friday on uncertainty over U.S. budget talks, although most traders still felt U.S. politicians would reach an eventual deal that could push equities higher in January. Investors have been focused this month on talks in the United States to avoid a "fiscal cliff" - a combination of government spending cuts and tax rises due to take effect early next year which could hit the U.S. economy. Lingering uncertainty over the outcome of the talks has prevented Britain's blue-chip FTSE 100 index from breaking through the 6,000 point level this month - a level seen by technical traders as key to propelling further moves higher. The FTSE was down by 0.4 percent, or 22.13 points, at 5,932.17 points by around midday. However, the majority of traders still felt U.S. politicians would reach an agreement to avoid getting hurt by the "fiscal cliff". They said that even if a deal were not reached by the end of December, an agreement could be struck in early January. "The market doesn't like the uncertainty but I think there will be some form of resolution in due course," said Cavendish Asset Management fund manager Paul Mumford. A Reuters poll earlier this month forecast that the FTSE 100 would end 2013 at 6,400 points, and Mumford was also upbeat on the prospects for British equities in 2013. The decision by central banks to cut interest rates to record lows, in order to fight off the effects of the euro zone's sovereign debt crisis and weak global economy, has hit returns on cash and benchmark government bonds. This, in turn, has driven many investors out of those assets and into equities, which tend to offer better returns via dividend payouts. "All in all, I take a favourable view of the outlook. In 2013, people will be looking for yield, and you're not going to get it from bonds," said Mumford, who highlighted healthcare stock GlaxoSmithkline as a good dividend play. The FTSE 100 has risen by around seven percent since the start of 2012, although it has underperformed gains of 30 percent on Germany's DAX equity index and a 15 percent rise on France's CAC-40 stock market. The outperformance of the German and French markets has been partly driven by a surge in euro zone equities after the European Central Bank pledged new measures to tackle the euro zone's sovereign debt crisis. Atif Latif, director of trading at Guardian Stockbrokers, expected the FTSE to end 2012 on a strong note, provided it did not fall below the 5,750 point level. "Should these levels hold on the downside then we see the market discounting bad news and having a strong finish into the end of 2012," he said. (Additional reporting by Jon Hopkins; Editing by Jon Boyle) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions