Energy stocks lead FTSE lower as oil price falls

Fri Aug 30, 2013 11:18am EDT

* FTSE 100 down 0.8 percent

* Energy shares main drag as oil falls on Syria

* Telecoms remain buoyant after Vodafone, Verizon talks

By Tricia Wright

LONDON, Aug 30 (Reuters) - British stocks dropped on Friday in a broad-based sell-off, led by energy shares as the price of oil fell after Britain's parliament rejected the idea of taking part in any U.S.-led military action against Syria.

Energy shares knocked some 12 points off the FTSE 100, as chances of an imminent strike against Syria that would hurt supply eased after Britain said no to intervention, but the continued threat of Western military action hit equity markets.

"People are squaring up long positions over the weekend as the Syria situation could easily escalate. That is dominating above any other news right now," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million in assets.

The FTSE 100 was down 53.39 points, or 0.8 percent, at 6,429.66 points by 1451 GMT, retreating after Thursday's 0.8 percent rise.

It looked to be heading for a 2.9 percent drop in August, a month in which investors have been anxious over prospects for diminishing U.S. stimulus as well as the situation in Syria.

GFT Markets technical analyst Fawad Razaqzada was cautious on the UK benchmark, which came under pressure on Friday after testing key resistance at 6,500.

"The trend ... remains bearish unless this level is taken out on a daily closing basis," he said.

Among brighter spots, telecoms added more than 4 points to the index, remaining buoyant after Vodafone confirmed on Thursday it was in talks to sell its stake in its U.S. joint venture with Verizon. (Additional reporting by David Brett; editing by Stephen Nisbet)

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