Energy stocks lead FTSE lower as oil price falls

Fri Aug 30, 2013 12:05pm EDT

* FTSE 100 down 1.1 percent

* Energy shares weaken as oil falls on Syria

* Telecoms remain buoyant after Vodafone, Verizon talks (Updates prices)

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 parliament rejected the idea of taking part in any U.S.-led military action against Syria.

Energy shares knocked some 13 points off the FTSE 100, as the vote reduced chances of an imminent Western strike that would hurt supply and raise oil prices, while other shares remained under pressure from the persisting uncertainties.

"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 closed down 70.12 points, or 1.1 percent, at 6,412.93 points, retreating after Thursday's 0.8 percent rise.

It posted a 3.1 percent drop in August, a month in which investors have been anxious over prospects for diminishing U.S. stimulus as well as the Syrian conflict.

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 almost 3 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 Ruth Pitchford)

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