Reuters: Hot Stocks: UK FTSE falls to 5-mth low as stimulus curb hits growth stocks

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UK FTSE falls to 5-mth low as stimulus curb hits growth stocks Jun 21st 2013, 16:26 Fri Jun 21, 2013 12:26pm EDT * FTSE 100 down 0.7 pct to 6,116.77 * Energy, financial and material stocks weigh on stimulus reduction fears * 6,000 is good entry level - 4 Shires By Francesco Canepa LONDON, June 21 (Reuters) - Britain's top shares recorded a fifth straight weekly loss after falling to a five-month low on Friday, hit by the prospect of a curbing of U.S. monetary stimulus. Energy, financial and materials stocks were the biggest drag as investors fretted a reduction in the U.S. Federal Reserve's asset purchases, flagged late on Wednesday, would curb growth and depress global markets. The three sectors knocked a combined 25 points off Britain's FTSE, which fell 43.34 points, or 0.7 percent, to 6,116.17 points, a level not seen since January. "We've taken some things off the table," said Jeremy Le Sueur, head of 4 Shires Asset Management, who recently reduced his holding of emerging market assets and some UK blue chips such as Tesco, keeping the proceedings in cash. Volume on the FTSE was twice its 90-day average and trading was choppy due to futures and options expiry, which forced many traders to rebalance their portfolio. Option prices showed investors were bracing for new jitters, with the VFTSE index of implied volatility rising 3.5 percent to levels not seen since December. "After (Fed chairman Ben) Bernanke's words, people are selling Europe and buying dollars," a broker said. Among single stocks, Royal Bank of Scotland fell 7.2 percent to the bottom of the FTSE and its lowest level for 14 months, hit by continued uncertainty over Britain's plans to examine a break-up of the bank. Yet, with the FTSE down 3 percent on the week and 11 percent from its May peak, some longer-term investors think the largest part of the selloff is now behind us. "Somewhere around 6,000 is an interesting level for the FTSE and I don't think we're going to fall much below that," 4 Shires' Le Sueur said. He owns large international UK blue chips such as HSBC , Vodafone and BP in light of their high yield and liquidity. The three stocks yield between 4.4 percent and 5.7 percent on this year's earnings, compared to a yield of 2.6 percent for the FTSE, Thomson Reuters data showed. (Reporting By Francesco Canepa) Link this Share this Digg this Email Reprints

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