Reuters: Hot Stocks: Britain's FTSE hits 5 month-low after Fed plans stimulus slowdown

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Britain's FTSE hits 5 month-low after Fed plans stimulus slowdown Jun 20th 2013, 11:04 Thu Jun 20, 2013 7:04am EDT * FTSE 100 falls 2.3 percent in biggest slide this year * Miners lead falls; China growth blip also weighs * Randgold down 7.6 percent as gold drops * Technical factors suggest buying opportunities around 6,000 By Alistair Smout LONDON, June 20 (Reuters) - Britain's top shares slid to five-month lows on Thursday, led by miners after the U.S. Federal Reserve said it planned to slow its stimulus programme later this year and Chinese data suggested growth there was waning. Mining stocks dropped 4.2 percent to four-year lows while the FTSE 100 index was down 2.3 percent at 6,201.00 by 1042 GMT - leaving it at levels not seen since January and on course for its biggest daily drop this year. Fed Chairman Ben Bernanke said overnight the U.S. economy was growing fast enough for the central bank to begin slowing the pace of its $85 billion monthly asset purchases later this year, with the goal of ending it in mid-2014. The S&P 500 closed down 1.4 percent on Wednesday "Data in the U.S. has been improving and with confirmation that the Fed is looking to taper... it's not surprising that European markets feel the pain more than the U.S. markets, as (the U.S.) economy has turned a corner," Alastair McCaig, analyst at IG Index, said. "On the FTSE, we're less comfortable with that guiding supporting hand being taken away." Commodity prices came under pressure, with gold at 2-1/2-year lows as demand for safe-haven asset suffered at the hands of a strengthening dollar. Gold miner Randgold was the top FTSE 100 faller, down 7.6 percent and taking this year's falls to 28 percent. Heavyweight miners Rio Tinto and BHP Billiton were down 4.8 percent, taking 13 points off the index. Copper miners also suffered after Chinese factory activity weakened to a nine-month low in June. "Although the U.S. economy is starting to recover, it's not at the stage where it can pick up the slack from a downturn in Chinese or Asian demand... hence the mining sector is taking that hit," McCaig said. The FTSE 100 flirted with the 6,200 level support level. More sturdy support was seen at a 38.2 percent retracement level of the rally from last summer, which roughly coincides with 2011 highs around 6,000. "As soon as we break below 6,080, I'd recommend taking short bets off the index, and if we get to 5,976, I'd be looking at buying," Valerie Gastaldy, head of technical analysis firm Day By Day, said. (Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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