Anglo American leads UK FTSE lower after strike

Wed Jan 16, 2013 4:36am EST

* FTSE 100 down 0.7 percent at 6,082.07
    * Index falls through technical support, faces further
pullback
    * Anglo American down 4.7 pct in heavy volume

    By Francesco Canepa
    LONDON, Jan 16 (Reuters) - Britain's top share index slipped
below a key support level on Wednesday, with miner Anglo
American leading fallers after it was hit by new strikes.
    Anglo American's shares shed 4.7 percent, having traded a
third of their full-day volume average at 0910 GMT, after
workers at one of its South African mines refused to go
underground in protest at company plans to close mines.
    The group's Kumba Iron Ore unit also warned on profits,
citing falling prices and illegal strikes. 
    The share was the biggest faller on the FTSE 100,
which was down 40 points, or 0.7 percent at 6,082.07. Also
weighing on the index was Imperial Tobacco, which traded
without its dividend entitlement. 
    The FTSE, which hit a 4-1/2 year high of 6,133 on Monday,
was also trading below its 2011 high of around 6,100, suggesting
buying momentum was fading. 
    "There wasn't a proper breakout and the fact that the index
is around or below that level does suggest to me that it could
struggle to make much headway in the near term," Bill McNamara,
a technical analyst at Charles Stanley, said.
    "...A break below (last week's low at) 6,053 would suggest
that a deeper corrective phase is under way."
    The next support for the FTSE was 6,008 points, the 23.6
percent retracement on the upward move between November and
Monday's intra-day high of 6,133.
    Traders said investors were reluctant to add to their
holdings of shares, given the near 10 percent rally since
mid-November and with more indications about the health of the
global economy yet to emerge from the incipient U.S. earnings
season.
    Major banks Goldman Sachs and JPMorgan Chase & Co
, and online retailer eBay were due to report on
Wednesday.
    "The market is going to wait to see what happens when the
U.S. reporting season kicks off properly," Yusuf Heusen, a sales
trader at IG, said. "It's a case of wait and see at the moment."
    He said estimate-beating results could see the FTSE make new
highs, boosted by the steady flows of new money coming into
stocks in recent weeks.
    Weekly inflows into equity funds hit a five-year high during
the first full week of January, according to EPFR Global data,
as bond-buying programmes by major central banks drove down bond
yields and pushed investors into riskier asset classes.

 (Reporting By Francesco Canepa; Editing by John Stonestreet)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video