Reuters: Hot Stocks: UK's FTSE dips after rally as mining stocks weaken

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UK's FTSE dips after rally as mining stocks weaken Apr 26th 2013, 08:12 Fri Apr 26, 2013 4:12am EDT * FTSE 100 down 0.3 pct, ends 3-day rally * Mining stocks weaken as copper price slips * Traders see FTSE's broad upwards trend as still intact By Sudip Kar-Gupta LONDON, April 26 (Reuters) - Britain's benchmark share index edged lower on Friday after a three-day rally, hit by weaker mining stocks and caution ahead of U.S. economic data later in the session that led investors to trim equity holdings. The blue-chip FTSE 100 index fell by 0.3 percent, or 22.04 points, to 6,420.55 points in early trading. Some traders said the bias was more on being "short" of the FTSE - betting on a market decline - than going "long" to bet on a rise ahead of the U.S. GDP data due at 1230 GMT. The world's biggest economy is forecast to have expanded by 3.0 percent in the first quarter after growth nearly stalled at 0.4 percent in the fourth quarter. "The acceleration button has started to wane. The preference at this early stage is to go short rather than go long," said Darren Easton, director of trading at Logic Investments. Mining stocks such as ENRC and Evraz led the FTSE 100's loserboard, which Easton attributed to a decline in the price of copper on Friday and investors looking to book profits on a recovery in those stocks' prices this week. "The miners have had a good run and they're the first to get hit by the profit-taking," he said. BUY ON DIPS The FTSE's decline pushed it down towards its 50-day simple moving average level, which stands at around 6,380 points, and Easton said any fall below that level could herald a bigger move down to around the 6,300 point mark. Yet even though the FTSE has edged back over the last month from a 2013 intraday peak of 6,533.99 points in mid-March, it remains up by nearly 10 percent since the start of 2013. Equity markets have been supported by stimulus measures by world central banks, and many investors also expect a gradual recovery in the global economy to boost stock markets over the course of 2013. This has led traders to use days when the market has fallen to buy up stocks "on the dip", which in turn has prevented any deeper pull-back on the FTSE 100. EGR Broking managing director Kyri Kangellaris said the fact that declines last week on the FTSE 100 failed to push it below the 6,200 point mark were a sign that its broader positive trend remained intact. "I'd be 'long' with a view to seeing the FTSE testing its earlier highs again," he said. (Editing by Catherine Evans) Link this Share this Digg this Email Reprints

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