Britain's FTSE knocked by Carnival, energy firms

Wed Sep 25, 2013 7:37am EDT

* FTSE 100 down 0.4 percent

* Carnival hit as analysts react to profit warning

* Centrica, SSE drop on opposition price cap plan

By Tricia Wright

LONDON, Sept 25 (Reuters) - Britain's top shares crept lower on Wednesday, led down by Carnival after a profit warning triggered downgrades, while Centrica and SSE fell after the opposition Labour Party talked of an energy price freeze.

Carnival slid 6.6 percent to 2,110.68 pence, the FTSE 100's top faller for the second session in a row, after Tuesday's warning of a possible loss prompted Morgan Stanley to downgrade the cruise operator to 'underweight'.

Technical analysts were wary of the stock, trading near trend line support around 2,100 pence.

"It is vitally important that the buyers hold their ground here, otherwise they will be in trouble," Fawad Razaqzada, market strategist at GFT Markets, said.

He puts the next downside target at the May 2013 low of 2,017 pence.

Other top fallers included Centrica and SSE, which were left nursing respective declines of 4.6 percent and 4.2 percent after opposition leader Ed Miliband said he would cap energy prices if elected in 2015.

Centrica was also trading without entitlement to the latest dividend payout on Wednesday, alongside Old Mutual and RSA, down 1.9 percent and 2.3 percent.

The FTSE 100 was down 23.64 points, or 0.4 percent, at 6,547.82 points by 1049 GMT.

Concern about the outlook for U.S. fiscal policy is keeping investors on edge and the index stuck around the 6,600 level, but some analysts saw scope for near-term gains.

GFT's Razaqzada noted that the index continues to find support around its 50-day moving average, at 6,551, "and so long as it holds above it on a closing basis, then the shorter-term bullish trend should be good".

For him, the 78.6 percent Fibonacci retracement level of August's range - at 6,635 - is the key resistance, for now.

The U.S. economy faces a federal government shutdown if politicians cannot agree on a budget by the end of the month.

However, Commerzbank economist Peter Dixon cited valuations and the global growth backdrop as supportive of the British index.

"Valuations look okay. The international environment is clearly uncertain... (but) the global economic environment is beginning to if not significantly pick up then certainly brighten," he said.

The FTSE 100 trades on a 12-month forward price/earnings ratio of 12.2 times, against its 15-year average of 14.7 times, according to Thomson Reuters Datastream. (Reporting by Tricia Wright, additional reporting by Toni Vorobyova; Editing by Ruth Pitchford)