Reuters: Hot Stocks: FTSE retreats from five-year high, miners hit by China data

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FTSE retreats from five-year high, miners hit by China data May 13th 2013, 09:28 Mon May 13, 2013 5:28am EDT * FTSE 100 index falls 0.2 percent * Charts signal rally continuing * StanChart falls on negative investor comment By Atul Prakash LONDON, May 13 (Reuters) - Britain's blue chip shares dipped on Monday after disappointing Chinese industrial production data prompted some investors to take profits on the FTSE 100's recent rally to more than five-year highs. Charts, however, suggested the rally was likely to resume as technical indicators remained positive and the index could target a break beyond its 2007 highs. At 0839 GMT, the benchmark index was down 15.68 points, or 0.2 percent at 6,609.30 after advancing for a seventh straight session on Friday. It ended last week at 6,624.98, its highest close since October 2007. "There is no evidence that the rally is losing momentum. It's encouraging the index has broken above its highs for the year and its 50-day and 200-day moving averages are trending higher," Bill McNamara, technical analyst at Charles Stanley & Co, said, adding the index would face resistance at its 2007 high of 6,750. While the index was showing "overbought" trading conditions, which often trigger a sell-off, such a pull-back tends to occur in a bear market, not when momentum indicators stay positive, McNamara said. The index's 14-day relative strength index was near 70 - the level above which an index is considered "overbought" - but in January it rose to as high as 84. Analysts said Monday's slight pullback was a knee-jerk reaction to data showing China's factory output grew 9.3 percent in April, missing market expectations for a 9.5 percent expansion. Mining shares, which are sensitive to macroeconomic data from China, the world's biggest metals consumer, were on the backfoot. The UK mining index fell 0.8 percent. Banks also came under pressure, led by a 4 percent drop in Standard Chartered's shares. Traders attributed StanChart's fall to negative comments on the stock by investor Carson Block. He told Bloomberg News that he was betting against the bank due to a possible deterioration in the quality of its loans. Keith Bowman, equity analyst at Hargreaves Lansdown, suggested investors continue to focus on defensive sectors. "Given sizeable uncertainty, defensive sectors still remain core," he said. (Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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