Reuters: Hot Stocks: FTSE slips on U.S. stimulus concerns, China data

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FTSE slips on U.S. stimulus concerns, China data Jun 3rd 2013, 08:38 Mon Jun 3, 2013 4:38am EDT * FTSE 100 down 0.7 percent * Energy sector weakens as oil price slips * Eyes on U.S. ISM manufacturing PMI later in session By Tricia Wright LONDON, June 3 (Reuters) - Britain's blue chip shares fell on Monday, tracking weakness in major global markets due to fresh worries about a curbing of U.S. monetary stimulus and downbeat data from China. The FTSE 100 was down 48.79 points, or 0.7 percent, at 6,534.30 by 0807 GMT, having dropped 1.1 percent on Friday. The index lost 1.1 percent in May as profit takers moved in after 12 straight months of gains. U.S. stocks fell sharply on Friday and Japan's Nikkei average tumbled to a near six-week low on Monday on renewed uncertainty over the Fed's intentions on its economic stimulus measures after better-than-expected U.S. data on Friday. Further darkening the mood, data showed Chinese growth was failing to pick up momentum with factory activity shrinking and business in the services sector also slipping. "First day of the month so normally the market is supported by inflows but after Friday's sell-off in the U.S. and another drop in the Nikkei overnight we are due a difficult session in the FTSE today," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million in assets. Traders said the U.S. non-farm payrolls report due on Friday would be key to gauge how soon the Fed's stimulus programme could be scaled back, and they expected investors to scrutinise Monday's ISM Manufacturing PMI index to fine-tune their forecasts. Some traders reckoned the FTSE 100, up some 25 percent since June 2012 aided by global monetary stimulus, was ripe for a pullback, particularly heading into summer when stockbrokers take off on holiday and markets are quiet. "I think we have gone too far too fast ... and risks are to the downside, especially as we reach the summer doldrums," Nick Xanders, head of European equity strategy at BTIG, said. With no major scheduled UK company news for investors to mull over on Monday, the FTSE 100 was a sea of red, led down by energy stocks as the oil price weakened on concerns over the outlook for demand after the downbeat China data. Chip designer ARM Holdings shed 1.9 percent, among the top fallers, after the company's new processor aimed at defending its mid-market smartphone share failed to assuage worries over the Cambridge-based firm's lofty valuation. ID:nL5N0EF14D] ARM has more than doubled since a trough in July 2012, putting it on a 12-month forward price/earnings ratio of 43.9 times, well above its 10-year average of 30.1 times, according to Thomson Reuters DataStream. (Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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