Reuters: Hot Stocks: Britain's FTSE retreats as profit takers move in

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Britain's FTSE retreats as profit takers move in May 29th 2013, 11:25 Wed May 29, 2013 7:25am EDT * FTSE 100 down 1.3 percent * M&S, AMEC weaken after going ex-dividend * Banks, pharma, tobacco biggest sector fallers By Tricia Wright LONDON, May 29 (Reuters) - Britain's top share index fell on Wednesday as investors locked in profits after the previous session's steep gains, with stocks trading without their latest dividend suffering some of the biggest falls. The FTSE 100 was down 90.14 points, or 1.3 percent, at 6,671.87 by 1052 GMT, having gained 1.6 percent on Tuesday on pledges of continued monetary stimulus from major central banks. Still, the index is on course for a near 4 percent monthly gain - its best month since January 2013 - which would mark its twelfth consecutive month of rises. With no major UK company news or economic data for investors to mull over on Wednesday, the FTSE 100 index was a sea of red, led lower by the banking, pharmaceutical and tobacco sectors. While officials from the Bank of Japan and the European Central Bank have reiterated that they will keep policies designed to foster growth in place, strong U.S. economic data on Tuesday reignited concerns about the Federal Reserve's plans. The UK equity market fell sharply late last week after Fed Chairman Ben Bernanke said the U.S. central bank could consider scaling back its bond-buying operations at one of its next few meetings if the U.S. economy looked set to maintain momentum. "Underlying fundamentals may still point to more upward momentum in the FTSE, but with investor nervousness about the Fed having a rethink on QE (quantitative easing) and some month-end profit-taking on the back of sharp rises, we are no doubt in for a volatile few days," Mike McCudden, head of derivatives at Interactive Investor, said. After the FTSE 100 closed last week 110 points from its record close of 6,950.60 set in late 1999, some analysts said bouts of volatility could offer attractive entry points for investors. "I'm still reasonably positive ... I don't think the central bankers are going to pull the rug away perhaps quite as quickly as the markets think," Commerzbank economist Peter Dixon said. "That said, we probably shouldn't expect the kind of uninterrupted gains that we've seen over the past four to six weeks." However, Bill McNamara, analyst at Charles Stanley, cautioned that a break back below Friday's trading low of 6,640 "would not look good" and would "suggest that a retreat to test the break above the March highs, at around 6,530, was underway". Stocks trading without the attraction of their latest dividend, namely Marks & Spencer and AMEC, pushed down the index to the tune of 0.97 points. (Reporting by Tricia Wright; Editing by Ruth Pitchford) Link this Share this Digg this Email Reprints

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