Reuters: Hot Stocks: Britain's FTSE 100 dives as stimulus worries mount

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Britain's FTSE 100 dives as stimulus worries mount Jun 11th 2013, 11:10 Tue Jun 11, 2013 7:10am EDT * FTSE 100 down 1.5 pct at 6,306.07 * Insurers, asset managers fall on stimulus fears * Ocado rallies on M&S bid talk By David Brett LONDON, June 11 (Reuters) - Britain's top shares were falling again by midday on Tuesday amid worries over central banks withdrawing the stimulus that has fuelled the rally over the past year. The Bank of Japan was the latest to cause angst among investors as it chose not to provide fresh stimulus to boost the economy further. Japan's announcement came hot on the heels of the European Central Bank and Bank of England saying last week that, for the time being, they were unwilling to do more to help the economy. U.S. Federal Reserve officials, meanwhile, have been openly discussing when would be the best time to start trimming the U.S. asset-purchase programme, which involves it spending $85 billion a month on Treasury and mortgage-backed bonds. "The Fed's problem is they have caused a whole change of asset allocation," Marcus Ashworth, part of the macro strategy team at Espirito Santo, said. "The mere mentioning of tapering has sparked a fundamental realisation that investors in higher risk, higher yielding assets are in the wrong place now." London's blue chip index was down 94.38 points, or 1.5 percent, at 6,306.07 by 1025 GMT. The index has fallen nearly 8 percent since its mid-May peak. With the prospect of asset purchases being reduced and bond yields potentially rising as a result, bond-like equities were among the top fallers. Insurers Prudential and Old Mutual, which offer higher yields and have big exposure to bond markets, shed 4.2 percent each. Falling equity markets are not good for asset managers either, because they can spark redemptions from nervous investors and falls in assets under management. Aberdeen Asset Management slipped 5 percent and Man Group dropped 8.5 percent, blighted by the recent weak performance of its flagship AHL fund. Higher beta stocks - those acutely exposed to the fortunes of the broader economy - also fell, with Miners such as Evraz, which faces relegation to the FTSE 250 , down 5.1 percent. The standout gainer across the entire FTSE was online grocer Ocado, up 8.1 percent on speculation that Marks & Spencer could gatecrash the online grocer's joint venture with Wm Morrison, traders said. (Editing by David Goodman) Link this Share this Digg this Email Reprints

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