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

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Britain's FTSE falls for fifth session, Cyprus weighs Mar 21st 2013, 17:05 Thu Mar 21, 2013 1:05pm EDT * FTSE 100 posts 5 days of falls for 1st time in 10mths * Low volumes show many sitting out market fall * Charts suggest broad up-trend still in tact By Toni Vorobyova LONDON, March 21 (Reuters) - Britain's blue chip shares fell for a fifth day on Thursday, retreating further from five-year highs and posting their longest downturn in 10 months as lack of resolution on a rescue for Cyprus rattled markets. Investors initially took a fairly benign view of the Cyprus crisis, but have been unsettled by parliament's rejection of an EU bailout that would have taxed savings and the absence of any immediate sign that Russia will step in with fresh 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. Although Cyprus accounts for only around 0.2 percent of the euro zone economy, the crisis there has cast the spotlight back onto the problems in the region and dampened appetite for risk assets across the globe. The FTSE 100 closed down 44.15 points, or 0.7 percent at 6,388.55 points, extending its retreat from a five-year peak of 6,533.99 points hit earlier this month. With the index still up 8.4 percent so far this year, traders said more profit-taking could be expected in the run up to quarter-end and a four-day Easter weekend next week. "We've seen a lot of institutional selling in the last couple of days so it wouldn't surprise me to see some more profit-taking ahead of the break," said Steve Asfour, head of sales trading at Fox Davies Capital. "I think 6,250 will be the next level where you could see buyers coming in." 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 Britain, which counts the single currency bloc as its top trading partner. 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 benefit ting from the translation effects of the weak currency on their foreign earnings. Volumes on the FTSE, though, remained relatively subdued, at just 83 percent of the 30-day daily average. The scale of the weakness was also relatively modest when compared to previous bear markets rather than to the fairly steady uptrend in place since last summer. The FTSE 100 has lost just 1.6 percent over the last five sessions, compared to a drop of 5.5 percent over the same number of days last May. As a result, technical charts suggest it is too soon to call an end to the broader up-trend and turn bearish. "I think we are still in a bull market but I am really worried to be buying at these levels - there is just too much uncertainty about Cyprus and everything else, and after the major rally we've seen, there is bound to be some profit taking," said GFT Global Markets technical analyst Fawad Razaqzada. He said he would turn bullish if the FTSE 100 breaks above last Friday's high, and would turn bearish if it falls below 6,340 points. (Editing by Catherine Evans) Link this Share this Digg this Email Reprints

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