Tesco sell-off leads UK FTSE lower for fourth session
* FTSE down 0.5 pct to 6,270 pts
* Index breaks support at 6,300
* Tesco falls 3.5 pct after write-off
* BHP down 2.8 as update disappoints
By Francesco Canepa
LONDON, April 17 (Reuters) - Britain's top share index fell for a fourth straight session on Wednesday, hit by a fall in mining shares and supermarket Tesco after some weak corporate reports.
Tesco's stock was down 3.5 percent to 371 pence after Britain's biggest retailer confirmed it will exit its loss-making Fresh & Easy business in the United States, taking a 1 billion pound ($1.53 billion) writeoff.
It knocked 4.2 points off Britain's FTSE 100 index, which was down 32 points, or 0.5 percent at 6,270 points inching below a psychological support level at 6,300.
"The overall trend is still down," Dan Reed, a broker at HB Markets said. "I have 5,900 in my head as the possible low at this point in time. Unless there is some poor news flow I am not sure it will happen straight away, but ultimately (it will)."
Reed said supermarket Tesco could become an interesting speculative "buy" if its shares fell back into the 360-350 pence area, judging most bad news is now well known.
He has been buying defensive stocks, such as consumer goods company Reckitt Benckiser, which typically outperform falling equity markets.
Mining stocks, which tend to track the global economic cycle and underperform a falling market, also weighed on the FTSE on Wednesday, with the world's biggest miner, BHP Billiton, down 2.8 percent following a production update.
"(Quarterly) production reported last night was, frankly, disappointing," analysts at Bernstein Research said in a note.
"Met coal, iron ore and petroleum all disappointed relative to expectations and base metals was a mixed bag with a positive copper performance offset by poor results in silver and lead."
Rio Tinto fell 2.7 percent as copper prices slipped, weighed down by concerns over demand growth.
But traders and investors said demand for metals and cyclical shares could pick up, along with inflation expectations, if the U.S. Federal Reserve sticks to its easing stance after mixed economic data.
"What we really like is the easy monetary policy that can potentially create currency devaluation," Christopher Mahon, director of asset allocation research at Baring Asset Management, which manages 39.4 billion pounds ($60.25 billion).
"The UK stock market is very much linked to international growth areas and you are getting that backdrop by buying UK stocks."
Luxury brand Burberry provided an example of that global exposure, rising 5.1 percent as it posted a better-than-expected revenue thanks to strong demand for its more expensive products in China.
However Mahon cautioned a temporary softening of global economic data in the second quarter of the year would likely result in a stock market pullback after a 16 percent rise in the FTSE between November and March.
"We are therefore quite cautious of adding at this time and so we are thinking that we will be waiting for good entry point before we increase our positions," he said. ($1 = 0.6540 British pounds) (Reporting By Francesco Canepa; Editing by Louise Heavens)
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