FTSE falls as Greek debt deal wait goes on
* FTSE down 0.4 percent * Miners fall as Greece and China cloud demand outlook * Greeks' strike as EU ministers ask for more cuts * Barclays rises despite profit miss By David Brett LONDON Feb 10 (Reuters) - Britain's top share index was slightly lower on Friday, as weak China imports prompted a bout of profit taking in the mining sector and as uncertainty over a bailout for Greece dragged on. The UK's benchmark index was down 24.08 points, or 0.4 percent at 5,871.39 by 1149 GMT, still hovering around six-month highs. Miners were the biggest weight on the index as investors banked gains from a sector that had risen as much as 22 percent since the start of the year. Appetite for mining companies has waned over the past week in response to some mixed earnings and China consumption concerns. The pace of growth in China, the world's most voracious consumer of commodities, remains a worry for investors and data from the country, which showed crumbling imports for January, stoked fears of a slowdown in demand. Miner Anglo American fell 2.5 percent as diamond producer De Beers, of which Anglo owns 45 percent, reported a dip in annual production and said it expected to continue to rein in output growth in 2012. Greece's inability to agree terms acceptable to its creditors to trigger a second bailout package also weighed on the market. Greek workers went on strike against austerity measures on Friday, docking ships and halting public transport, hours after euro zone finance ministers said Athens needed to make more cuts to convince them to release the bailout cash. "The market is starting to factor in continuing problems with Greece and if it does default the belief is that it will be contained, and central banks will standby ready to flood the banks with liquidity," David Morrison, strategist at GFT Global, said. "Ultimately the problem of how the central banks will eventually wind down their balance sheets is just a problem for another day," he said. EARNINGS CONCERNS European fourth-quarter earnings reports from the STOXX Europe 600 are finely balanced, with energy firms posting the biggest positive surprise so far and financials lagging expectations by the biggest margin, Thomson Reuters StarMine data to the Thursday close shows. Cable and Wireless Communications shed 12.7 percent after it warned that increasing competition and weak demand from corporate clients had hit its business in Panama, taking the shine off solid performances elsewhere. With risk appetite on the wane given the macro outlook, banks were mainly lower, although Barclays bucked the weaker trend, up 2.3 percent albeit in choppy trade, as it reported mixed results. The UK lender warned it may miss its medium-term profitability target after its investment bank ended 2011 with its worst quarter for three years. "Investors are for the moment giving the bank the benefit of the doubt as a recovery play, such that on reflection the general market view of the shares as a buy should remain intact," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers. For those looking for exposure to diversified financials in the face of global macro uncertainty, Goldman Sachs recommended UK asset managers over "market structure companies" as the latter segment is set to suffer from the consequences of continued bank deleveraging and tougher regulation. Accordingly, the broker downgraded inter-dealer broker Icap to "neutral" from "buy" - contributing to a 3.8 percent fall in the shares, while it upgraded asset manager Schroders to "buy" from "neutral". Another asset manager Man Group fell up to 3.3 percent, after recent gains and in tandem with other financials including insurers, as macro concerns returned to the fore. With risk appetite among investors receding, defensives were among the top performers. Drugmaker Shire rose 1.8 percent. Deutsche Bank said it recommended highly-rated stocks whose share price has performed well. The bank said its "Leaders" portfolio included a lot of healthcare companies, which fitted well with its 'defensive value' strategy, Deutsche's analysts said. Next, which is viewed as a defensive stock in the retail sector, climbed 1.8 percent as Deutsche bank raised its rating on the firm to "buy" from "hold". Next would have also received a boost from a fall in British factory gate inflation to its lowest in more than a year in January as input costs also rose at a much slower pace, data showed. Wall Street futures pointed to a lower open in the United States, ahead of December international Trade data at 1330 GMT. Economists in a Reuters poll expect a trade deficit of $48.0 billion in December versus a deficit of $47.75 billion in November. Preliminary figures from the Thomson Reuters/University of Michigan Surveys of Consumers will be released at 1455 GMT. February's preliminary consumer sentiment index is expected to come in at 74.5 compared with a 75 reading in the final January report.
- Tweet this
- Share this
- Digg this