Reuters: Hot Stocks: Britain's FTSE falls on Fed stimulus doubts

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Britain's FTSE falls on Fed stimulus doubts Jun 5th 2013, 07:50 Wed Jun 5, 2013 3:50am EDT * FTSE 100 down 0.6 pct at 6,517.62 pts * Fed officials talk of winding down stimulus plans * Tesco weighs after fall in domestic sales By Francesco Canepa LONDON, June 5 (Reuters) - Britain's leading share index fell on Wednesday as comments from U.S. Federal Reserve officials fanned talk the bank's monetary stimulus may be reduced. Major supermarket chain Tesco was among the top fallers after weak results. Dallas Fed President Richard Fisher said on Tuesday the bank might make changes to its bond-buying programme and Kansas City Fed President Esther George said slowing its pace of would help wean markets off dependence on easy money. The FTSE 100, which has rallied around 25 percent in the past year underpinned by central bank stimulus, was down 41 points, or 0.6 percent, at 6,517.62 points at 0735 GMT. That tracked a late selloff on Wall Street and sharp falls on the Nikkei in Japan, where the effectiveness of Tokyo's stimulus strategy was called into question, denting investor appetite for equities. "Every day we see a big fall out of the Nikkei, it takes some more of the buyers away," said James Hughes, chief market strategist at Alpari, who said the FTSE could fall as low as its-mid April top at 6,400. "The market is definitely on a knife edge at the moment, whether it does fall or it's a buying opportunity. We're breaking some important levels this morning so I'd be more on the short (selling) side." The FTSE was edging below technical support around 6,528, which held up the index earlier this week and corresponds to its March highs. Technical traders were monitoring the next support areas at 6,490, the index's 50-day moving average, and 6,460, the 61.8 percent retracement of the April-to-May rally. Tesco shed 2.7 percent after reporting a 1 percent fall in underlying sales in the UK in the first quarter, toward the lower end of analysts' expectations and raising doubts about a costly recovery plan. "This poor performance will raise questions about the company's growth strategy, the momentum behind it and shareholders will undoubtedly scrutinise management at Tesco after this report," Joe Rundle, head of trading at ETX Capital, said in a note. Conglomerate AB Foods, energy distributor National Grid and advertising agency WPP also weighed on the FTSE as they started trading without dividend entitlements. (Reporting By Francesco Canepa; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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