Reuters: Hot Stocks: Britain's FTSE falls for 5th session, Cyprus weighs

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Britain's FTSE falls for 5th session, Cyprus weighs Mar 21st 2013, 11:49 Thu Mar 21, 2013 7:49am EDT * FTSE 100 falls, on track to match May 2012 downturn * Low volumes show many sitting out market fall * Banks, miners among top fallers By Toni Vorobyova LONDON, March 21 (Reuters) - Britain's blue chip shares fell for a fifth day on Thursday, the longest downturn in 10 months, as a lack of resolution to the Cyprus bailout crisis and weak euro zone data rattled the market. Investors had originally taken a fairly benign view on Cyprus, but have been unsettled by the lack of a resolution in sight after parliament rejected an EU bailout and Russia showed no immediate signs of stepping in with the much-needed cash. The European Central Bank has given Cyprus until Monday to raise the money it needs to secure a bailout, or face losing emergency funding for its crippled banks. Data showing an unexpected downturn in the euro zone manufacturing sector this month - even before the Cyprus crisis took hold - added to a gloomy mood in the London market. UK-listed blue chip companies generate only around a quarter of their revenues in the UK and many are very exposed to the euro zone. The FTSE 100 was down 52.35 points, or 0.8 percent at 6,380.35 points by 1122 GMT. The market's slide over the past five sessions matched the length of a retreat seen last May, when problems in Spain and Greece were in the spotlight. The scale of the weakness this time, though, is much smaller, with the index down just 2.2 percent over the five sessions, compared to a drop of 5.5 percent in the May downturn. "As events unfold and it looks like its not going to be a quick solution, it's the lack of clarity that keeps a lot of people away from the market," said Zeg Choudhry, head of equities trading at Northland Capital, adding that the trend of buying on dips, seen in recent weeks, was "much reduced". "Next week will probably be even worse because we are going into the Easter holidays, volumes are very light ... (But) you would have seen a much bigger fall in the market if people were really cautious about it." Financials, the UK sector most directly linked to any problems in the euro zone and its banks, were among the biggest weights on the FTSE 100, taking 6 points off the index. Heavyweight energy companies also weighed, as Cyprus worries pushed down oil prices. The euro zone concerns sent sterling to five-week highs versus the euro in another potential negative for UK blue chips, who had been benefitting from the translation effects of the weak currency on their foreign earnings. Volumes on the FTSE, though, remained relatively subdued, with just 22 percent of the 90-day daily average traded in the first 2-1/2 hours, as long-term investors chose to hold onto their positions. "The broad, slightly risk-on approach that I have adopted over the past three or four years I think still holds good. Can the whole thing be scuppered by events in Cyprus? It is possible, but not probable," said Tim Rees, UK fund manager at Insight Investment. (Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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