Reuters: Hot Stocks: FTSE sinks on Chinese data, U.S. stimulus concerns

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FTSE sinks on Chinese data, U.S. stimulus concerns May 23rd 2013, 08:21 Tweet Share this Email Print Thu May 23, 2013 4:21am EDT * FTSE 100 falls 1.7 percent after Bernanke's comment on stimulus * Miners down on poor China factory activity survey * United Utilities among handful of risers post results By Tricia Wright LONDON, May 23 (Reuters) - Britain's top shares fell sharply on Thursday, dropping off 13-year highs on weak Chinese economic data and worries the U.S. Federal Reserve could soon taper its stimulus programme. Mining stocks suffered steep losses after HSBC's preliminary survey of purchasing managers showed factory activity in China, the world's top metals consumer, shrank for the first time in seven months in May. Also pressuring equities, Fed chairman Ben Bernanke said late on Wednesday the central bank could scale back the pace of bond purchases at one of its next few meetings if economic momentum was maintained. The FTSE 100 was down 114.82 points, or 1.7 percent, at 6,725.45 by 0805 GMT, having closed up 0.5 percent at 6,840.27 on Wednesday. The highest close on record for the index was at 6,930.20 in late 1999. Many traders and investors reckoned any pull-back would be relatively short-lived before the index resumes a rally that had seen it rise around 16 percent in 2013 until Wednesday's close. "A fall-back would be healthy ... Markets had just gotten ahead of themselves and were technically ready for a correction," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million in assets. Mike van Dulken, head of research at Accendo Markets, reckoned that 6,700 would act as a support for the index. In a yield-hungry market, there was a defensive flavour to the handful of FTSE 100 risers on Thursday, with water company United Utilities ahead 0.6 percent after unveiling full-year results which traders said were in line with expectations. According to Thomson Reuters StarMine data, the stock has a dividend yield of 4.2 percent. Peer Severn Trent firmed 0.2 percent. Meanwhile bicycles-to-car-parts group Halfords paid for slashing its dividend to fund a three-year sales push, suffering a more than 10 percent drop in its share price. (Reporting by Tricia Wright; Editing by John Stonestreet) Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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