Reuters: Hot Stocks: Weak mining stocks knock UK's FTSE off 1-month highs

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Weak mining stocks knock UK's FTSE off 1-month highs Sep 13th 2013, 14:50 Fri Sep 13, 2013 10:50am EDT * FTSE down 0.3 pct in late session trade * Fall in metals prices hits mining stocks * Some traders trim equity positions ahead of Fed meeting By Sudip Kar-Gupta LONDON, Sept 13 (Reuters) - UK blue-chip stocks fell off one-month highs on Friday as a fall in metals prices hit miners and traders trimmed equity positions on expectations the Federal Reserve will scale back stimulus. The FTSE 100 index was down 0.3 percent, or 21.01 points, at 6,567.92 points in late trade. Miners dominated the FTSE's loserboard as the price of gold fell to a five-week low, with the FTSE 350 Mining Index declining by 2.2 percent. Equity markets were also under pressure from expectations that the Federal Reserve will start next week to scale back a bond-buying programme that has pumped out cheap money, financing much of this year's global equity rally. That prospect has led many traders to unload equity positions, cashing in profits on gains made so far this year. The FTSE 100 is up 11 percent since the start of 2013. "We're looking to follow the trend and take our chips off the table," said MB Capital trading director Marcus Bullus. Others felt concerns about the impact on equity markets of the Fed tapering off its bond-buying programme were overdone. "I think there's a lot of noise around about the Fed, but if they're considering taking off tapering, then it should give you confidence that they think the economy is strong enough to withstand that," said Chris White, head of UK equities at Premier Asset Management. White preferred media and financial stocks in the current environment. They are often dubbed as 'cyclical' stocks as they tend to outperform when the economic cycle strengthens. The UK economy is showing signs of recovering from the effects of the 2008 global financial crisis, and data on Friday showed that construction output accelerated in July. "You want to be moving a bit more in the direction of cyclical than defensives," said White. ($1=0.6319 British pounds) (Additional reporting by Alistair Smout; Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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