Reuters: Hot Stocks: FTSE falls on Fed stimulus worries, IAG jumps

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FTSE falls on Fed stimulus worries, IAG jumps Nov 8th 2013, 08:59 Fri Nov 8, 2013 3:59am EST * FTSE 100 down 0.4 pct * IAG top riser after Q3 profit soars * Rolls-Royce gains, lifts defence aero profit forecast * U.S. jobs data eyed, due at 1330 GMT By Tricia Wright LONDON, Nov 8 (Reuters) - Britain's top shares fell on Friday as robust U.S. economic data revived expectations that the U.S. Federal Reserve might trim its stimulus this year, overshadowing positive updates from International Airlines Group and Rolls-Royce. IAG topped the FTSE 100 leader board, gaining 4.6 percent after its third-quarter profit more than doubled as its Spanish carrier Iberia started to show signs of recovery, adding to another strong performance from British Airways. Peer easyJet advanced 0.8 percent, with traders citing a positive read-across. Rolls Royce also notched up good gains, ahead 3.2 percent, after it raised profit guidance for its defence aerospace unit and said the overall business was trading in line with expectations. The UK blue chip index was down 25.83 points, or 0.4 percent, at 6,671.39 points by 0846 GMT, retreating further from a five-month high of 6,819 hit last and shaving its gain for 2013 to 13.1 percent. U.S. October non-farm payrolls figures, set for release at 1330 GMT, will be scrutinised for more clues as to when the U.S. Federal Reserve will start to reduce the $85 billion-a-month bond-buying programme which has underpinned equity markets. Economists forecast 125,000 jobs were created in October, slowing from 148,000 jobs in September. Data on Thursday showed U.S. growth accelerated to 2.8 percent in the third quarter, well above an economists' forecast for 2.0 percent growth. Some investors took the view the robust data could bring forward the timeline for when the Fed starts to scale back its stimulus. "We're in this strange situation at the moment where good news is bad news. If the non-farms are much better than expected... that will bring the possibility of some sort of QE tapering in December," said Richard Hunter, head of equities at Hargreaves Lansdown. Hunter said he thought a jobs number over 150,000 could trigger a 100-point drop on the FTSE 100. Conversely, a figure under 100,000 could see the index climb 1-2 percent, he said. Atif Latif, director of trading at Guardian Stockbrokers, took a similar view, anticipating a move up to 6,780 on the FTSE 100 on a weak number - between 100,000 and 125,000 - and a sell-off in what he deemed the unlikely event of a strong number. (Reporting by Tricia Wright; Editing by Gareth Jones) Link this Share this Digg this Email Print Reprints

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