Reuters: Hot Stocks: Britain's FTSE weakens ahead of U.S. jobs data

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Britain's FTSE weakens ahead of U.S. jobs data Apr 5th 2013, 08:31 Fri Apr 5, 2013 4:31am EDT * FTSE 100 down 0.5 percent * Miners decline, U.S. jobs data eyed * ENRC bucks weak trend on UBS upgrade * Airlines drop on fears of bird flu pandemic By Tricia Wright LONDON, April 5 (Reuters) - Britain's top shares dipped on Friday, extending falls seen in the previous two sessions, on heightened concerns about the strength of recovery in the United States ahead of its monthly jobs report. The FTSE 100 was down 28.75 points, or 0.5 percent, at 6,315.37 at 0818 GMT, having sunk 1.2 percent on Thursday to its lowest close in more than a month after an unexpected rise in weekly U.S. jobless claims which stoked fears Friday's data will disappoint. "The UK market has struggled over the last month to keep up its momentum and is now looking technically very vulnerable," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million in assets. "I would be very careful being long at this point in time - a lot of good news has been priced in." The UK benchmark is now trading below its 50-day moving average, having breached it on Thursday for the first time since late November. Charles Stanley technical analyst Bill McNamara cautioned that a finish below a late February closing low, at 6,270, "would strongly suggest that a corrective phase is underway". Mining stocks, highly geared to the economic cycle, were among the biggest fallers, with the focus firmly on the U.S. March jobs figures, set for release at 1230 GMT, which is expected to show employers added 200,000 new jobs. Eurasian Natural Resources bucked the weak sector trend, the top FTSE 100 riser with a 4.6 percent gain, with traders citing a UBS upgrade to "buy" following recent share price weakness. Atif Latif, director of trading at Guardian Stockbrokers, said a weak jobs number - of around 150,000 - could see the FTSE 100 dip down to 6,250, while a number of between 220,000 and 250,000 could propel the index back up to the 2013 high of 6,533. But he noted that weakness has been attracting long-term buyers back into the market recently as equity valuations remain at the lower end of historical ranges. The 12-month forward price/earnings ratio for the FTSE 100 is at 11.6 times, according to Thomson Reuters data, against the historical average at 13.1 times. Airline stocks came under pressure, mirroring weakness in the sector across Europe, knocked by spreading concerns over a new strain of bird flu that has killed six people in Asia and triggered a sell-off in Hong Kong shares on Friday. All of the 14 reported infections from the H7N9 bird flu strain have been in eastern China and at least four of the dead are in Shanghai, a city of 23 million people. British Airways parent International Airlines Group topped the FTSE 100 fallers' list, off 4 percent, followed by easyJet which was left nursing a 3.8 percent drop. EasyJet's declines came in spite of a trading update in which the budget airline confirmed that performance was in line with previous expectations. Investec Securities, on Friday, lifted its rating on the stock to "buy", while hiking its target price to 1,200 pence, from 900 pence. "EasyJet is performing very well across both yields and cost efficiencies and we had been too early in calling the top of the shares and company performance when we moved from Buy to Hold in January 2013," it said in a note. Fashion retailer Next was another big faller, off 2.8 percent, with traders citing the impact of a Credit Suisse downgrade to "neutral", partly on valuation grounds. (Reporting by Tricia Wright, additional reporting by Blaise Robinson/editing by Chris Pizzey, London MPG Desk, +44 (0)207 542-4441) Link this Share this Digg this Email Reprints

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