Reuters: Hot Stocks: Financials drive Britain's FTSE lower on Fed exit chatter

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Financials drive Britain's FTSE lower on Fed exit chatter Jun 5th 2013, 16:09 Wed Jun 5, 2013 12:09pm EDT * FTSE 100 drops 2.1 percent * Fund managers top FTSE fallers * Credit Suisse see 9 percent gain into year-end * Tesco falls after sales miss By Alistair Smout LONDON, June 5 (Reuters) - Britain's leading share index fell on Wednesday, led lower by financials after comments from U.S. Federal Reserve officials intensified expectations the Fed's monetary stimulus may be reduced. 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 would help wean markets from their dependence on easy money. The FTSE 100 closed down 139.27 points, or 2.1 percent, at 6,419.31 points, with financials, a broad-based sector including fund managers, insurers and banks, taking 31 points off the index. "The Fed officials with their comments have been moving the market significantly, and if there is a downtrend, as there has been, we have to play that downtrend," Mike van Dulken, head of Research at Accendo Markets, said. "However, we shouldn't be afraid of (the Fed) tapering, because the Fed is looking for more people in employment, which will be good for global growth and stock markets." Fund managers were also among the big fallers in the finance sector partly because asset management firms are sometimes seen as long-term proxies for stock markets. Aberdeen Asset Management, the top non ex-dividend faller on the FTSE 100, down 5.7 percent after being cut from the UBS "key call" list. Schroders fell 4.3 percent. Mid-cap Man Group slumped 16.7 percent after its flagship fund suffered one of its biggest weekly losses. The FTSE 100 has fallen 5.2 percent in the last two weeks since Federal Reserve officials began pondering their exit strategy from a monetary stimulus programme which has helped to spur the index towards 13-year highs. The FTSE fell below technical support around 6,494, the index's 50-day moving average, and 6,460, the 61.8 percent retracement of the April-to-May rally. Accendo's van Dulken said the index could fall back as towards April lows around 6,220, but he retained a target of 6,600 for the end of the month. Despite the recent correction, analysts at Credit Suisse see 9 percent further upside to the FTSE 100, as the economy improves and earnings pick up, with concerns over the end of the Fed's monetary stimulus overdone. Stronger than expected UK Services PMI data was not enough to lift the FTSE 100, however, and mixed U.S. data provided little clarity over the state of the U.S. economy. Tesco, down 3.9 percent, contributed to the weaker tone of the market 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. Conglomerate AB Foods, energy distributor National Grid and advertising agency WPP also weighed on the FTSE as they started trading without dividend entitlements. (Editing by Jane Merriman) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions