Reuters: Hot Stocks: Britain's FTSE 100 pauses off highs, awaiting ECB action

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Britain's FTSE 100 pauses off highs, awaiting ECB action May 2nd 2013, 10:28 Thu May 2, 2013 6:28am EDT * FTSE 100 down 0.2 percent, retreating from 1-mth highs * Investors look for ECB to deliver cut, eye more measures * Miners hit by profit drop at Randgold, China growth fears By Toni Vorobyova LONDON, May 2 (Reuters) - Britain's FTSE 100 edged lower on Thursday, with miners hurt by weak Chinese data and investors unwilling to push the market to fresh highs until the European Central Bank delivers a widely anticipated interest rate cut. Expectations of a rate cut later on Thursday in the euro zone - Britain's top trading partner - have grown in the past week on a combination of weak economic data and low inflation. They have been a driver of recent gains in equity markets, including the FTSE's rise to one-month highs - levels at which investors started to get nervous. Prospects for Friday's U.S. non-farm payrolls report - arguably the most market-moving of all data releases - added to the cautious mood. "It's just a bit of profit taking before the ECB announcement, there's a little bit of uncertainty. Non-farm payrolls coming out tomorrow so, again, people are a bit tentative," said Vinay Sharma, trader at Gekko Global Markets. He was seeing some longer-term players taking money off the table with the start of May - traditionally seen as the start of a weaker, quieter summer period for markets. The FTSE 100 was down 11.90 points, or 0.2 percent, at 6,439.39 by 1005 GMT, retreating from the one-month high of 6,483.08 hit earlier this week. Analysts said the recent rally had priced in an ECB rate cut, leaving the market exposed to a correction if one is not delivered and putting the focus on any other measures announced with the bank's 1145 GMT policy decision or at the 1230 GMT press conference. "What will be interesting to see is if they have any further non-traditional measures," said Frederique Carrier, head of European equities at RBC Wealth Management. Miners were one of the weaker sectors after data showed slowing factory activity in China, the world's top metals consumer. In a sign of the problems facing the sector, Randgold Resources posted a steeper-than-expected fall in first quarter profit and slashed spending, sending its shares down 1.8 percent. Disappointing earnings also hit industrial engineers , which dropped 2.8 percent as a weak report from U.S. peer Cummins prompted investors to lock in profits on the sector's rise of 8.4 percent in the final eight sessions of April. BG Group, Royal Dutch Shell and Smith & Nephew all delivered upbeat earnings updates, sending their shares higher. (Additional reporting by Alistair Smout; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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