British shares pegged back by GlaxoSmithKline, HSBC

Tue Aug 6, 2013 3:48am EDT

* FTSE 100 index down 0.2 percent
    * Glaxo, HSBC knocked by analyst downgrades
    * Traders upbeat; GFT Markets targets 6,754 on index

    By Tricia Wright
    LONDON, Aug 6 (Reuters) - Britain's top share index edged
lower on Tuesday as heavyweights GlaxoSmithKline and HSBC fell
after downgrades by analysts, though traders saw scope for
further near-term market gains.
    The UK benchmark was down 13.17 points, or 0.2
percent, at 6,606.41 by 0734 GMT, having slipped 0.4 percent on
Monday, drifting back further from a two-month closing high hit
last week.
    Drugmaker GlaxoSmithKline and bank HSBC 
accounted for most of the FTSE 100's drop.
    Glaxo shed 1.3 percent as Citi cut its rating to "neutral"
from "buy", seeing the stock as fairly valued in the near term,
while HSBC, whose first-half results missed expectations on
Monday, fell 1.1 percent as Deutsche Bank cut its rating to
"hold" from "buy".
    While the equity rally stalls, recent encouraging economic
data, especially in the UK and the United States, along with the
fact global central banks have committed to stick with loose
monetary policies, provide continued cause for optimism.
    "If there is a dip I would see it as a buying opportunity...
It looks like the (global) economy is catching up with the
market," Shai Heffetz, MD of spreadbetting and CFD provider
InterTrader, said.
    GFT Markets technical analyst Fawad Razaqzada said he saw no
signs that the market had topped or was about to suffer a
serious sell-off, with the 2007 peak of 6,754 remaining his
immediate target.
    "As long as it continues to hold above 6,530/40 on a closing
basis, then the bullish trend remains intact," he said.
    Miner Fresnillo led the blue-chip fallers, off 7.7
percent after posting a 29 percent drop in first-half core
earnings and saying it would slash its dividend. 
    Peer Randgold Resources fell 2.5 percent, with
traders also attributing the declines to a weaker gold price.
 
    According to Thomson Reuters StarMine data, about 63 percent
of STOXX Europe 600 index companies have reported
results so far, of which around 56 percent have met or beaten
profit forecasts.  

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