Reuters: Hot Stocks: Britain's FTSE falls for 5th session; Cyprus crisis dominates

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Britain's FTSE falls for 5th session; Cyprus crisis dominates Mar 21st 2013, 09:20 Thu Mar 21, 2013 5:20am EDT * FTSE 100 falls for fifth straight session * Worries over Cyprus dent sentiment * Most investors still expect eventual Cyprus solution * Caution in near-term, longer-term outlook bullish * FTSE 100 falls below 20-day simple moving average level By Sudip Kar-Gupta LONDON, March 21 (Reuters) - Britain's benchmark share index fell on Thursday, losing ground for the firth session running as concerns about the financial crisis raging in Cyprus led investors to book profits on this year's rally. The blue-chip FTSE 100 index was down 0.65 percent, or 42.07 points lower, at 6,390.63 41 points in early morning trade. Although traders did not expect any major market fall, given expectations policymakers would eventually find measures to keep Cyprus solvent, they said ongoing uncertainty would lead to declines. "The longer this uncertainty over Cyprus continues, the more people will look to take profits on equities," said Securequity sales trader Jawaid Afsar. On Thursday, the European Central Bank has given Cyprus until Monday to raise the money its needs to secure a bailout, or face losing emergency funding for its crippled banks. The FTSE's decline pushed the index below its 20-day simple moving average level of around 6,420 points - a signal taken by some traders who use technical analysis that more declines would follow. But the five days of declines have been relatively modest, and the FTSE is still up 8 percent since the start of 2013. Afsar said he would still look to buy the market on days when it fell, due to expectations that the Cyprus hurdles would eventually be overcome and that equity markets will soon resume their upwards trend as the year progresses. RESOLUTION RISES Insurer Resolution topped the FTSE 100's leaderboard after Bank of America Merrill Lynch added it its "Europe 1" list of favoured stocks. A rise in United Utilities, after the company said it expected its annual underlying operating profits to be slightly higher than last year, also cushioned the FTSE 100 from bigger losses. Equity markets have been supported by pledges from central banks such as the Federal Reserve and the European Central Bank (ECB) to inject liquidity to spur a global economic recovery. "There's still plenty of liquidity around, and I would still look to buy the dips," said Afsar, who eyed buying into the FTSE if it fell to the 6,300 or 6,275 points level. A Reuters poll this week showed that analysts and fund managers expected the FTSE 100 to rise to 6,582 points by the middle of 2013, and to end 2013 at 6,750 points. Brown Shipley fund manager John Smith favoured relatively defensive stocks in the current climate, such as British American Tobacco, Diageo and Unilever, seen as among the most resilient to any economic downturn. Smith expected equity markets to trade sideways in the near-term before moving higher as the year progressed. "Short-term caution is probably appropriate but there is plenty of support for markets still out there," he said. (Reporting by Sudip Kar-Gupta; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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