Reuters: Hot Stocks: Britain's FTSE knocked by global growth concerns

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Britain's FTSE knocked by global growth concerns Mar 4th 2013, 12:44 Mon Mar 4, 2013 7:44am EST * FTSE 100 down 0.5 percent * Miners knocked, Kazakhmys leads sector lower * Banks weak, HSBC down 2.5 pct on results miss By Tricia Wright LONDON, March 4 (Reuters) - Concerns over the outlook for global growth knocked Britain's top share index on Monday, while HSBC was a significant faller after its earnings came in short of expectations. The FTSE 100 was down 31.86 points, or 0.5 percent, at 6,346.74 by 1229 GMT, albeit still within sight of a five-year peak of 6,412.44 struck on Feb. 20. The index has been trading in a 200-point range now since the end of January. Mining stocks came under pressure on worries over China tightening its grip on the property sector, potentially stunting the country's demand for raw materials. Kazakhmys led the market lower with a 5.3 percent drop, continuing a slide seen since Thursday when it warned of sharply higher costs, as Deutsche Bank became the latest investment bank to weigh in on the stock, cutting its target price to 650 pence. Anglo American fell 2.6 percent as Nomura cut its rating on the firm to "reduce" citing valuation grounds and viewing consensus earnings as too high for 2013. Also hurting sentiment were concerns about U.S. budget cuts - known as the "sequester" - which threaten to curb growth in the world's biggest economy, and over political instability following Italian elections, which has fuelled fears of a return of the euro zone debt crisis. Strategists, however, continued to recommend investors buy in on any dips. "A pull back in stocks wouldn't be surprising in the weeks ahead, though longer term we still think some of those dark macro clouds will start to lift and investor risk appetite will return," Henk Potts, market strategist at Barclays, said. Banks suffered too on Monday, with heavyweight HSBC off 2.5 percent, alone accounting for 13.4 points of the FTSE 100's drop, after it posted a pretax profit of $20.6 billion for last year, missing analyst expectations. But traders noted that clients retained long positions after the results. "The majority of Spread Co clients holding HSBC have remained long and a few have bought in at the lows of today as the share price has already begun to crawl back up," Rik Thakrar, risk manager and senior dealer at Spread Co, said. Retailer Next was another big faller, off 3.3 percent, on a read-across from mid-cap peer Debenhams which warned on profit on Monday, sending its shares 10.6 percent lower. Traders also cited a UBS downgrade to "neutral" on Next as a catalyst for its share price weakness. Defensive stocks such as utilities and drugmakers, providers of life's essentials which consequently tend to be in demand even in harsh times, found favour, limiting the index's falls. Drugmaker Shire added 1.1 percent, British American Tobacco firmed 1.3 percent, and Imperial Tobacco rose 1.2 percent. Centrica, ahead 2.1 percent, was also buoyed by an upgrade to "buy" from Societe Generale, which highlighted the utility's attractive valuation, balance sheet strength, and cash generation. (Reporting by Tricia Wright/editing by Chris Pizzey, London MPG Desk, +44 (0)207 542-4441) Link this Share this Digg this Email Reprints

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