FTSE edges down on weaker miners, falls for 3rd week

Fri Nov 22, 2013 11:48am EST

* FTSE 100 index closes 0.1 percent lower

* Miners take most points off the blue-chip index

* Tui Travel falls as key investor sells stake

By Atul Prakash

LONDON, Nov 22 (Reuters) - Britain's top share index ended slightly lower on Friday for a third straight week of losses, with miners down on concern about their earnings outlook and Tui Travel slipping after a key investor sold his stake in the company.

Tui Travel fell 7.8 percent on news Norwegian shipping magnate John Fredriksen had sold his entire stake in the British company.

The broader market came under pressure as the UK mining index fell 1.3 percent, making it the biggest sectoral loser. Vedanta Resources fell 3 percent, BHP Billiton 1.7 percent and Rio Tinto 1.6 percent.

"The general consensus seems to be that the big miners might find their earnings under pressure as costs remain static and perhaps commodity prices gradually weaken," said Tim Whitehead, investment manager at Redmayne-Bentley. "There has been a little bit of rotation out of the mining sector.

"With the Dow and the S&P 500 hitting new highs this week, a little bit of caution is creeping in. The market is in a tight range. However, it seems to be reasonably underpinned. We could see good demand at pullbacks."

The blue-chip FTSE 100 index ended 7.03 points, or 0.1 percent, lower at 6,674.30. It fell 0.3 percent during the week but is still up about 13 percent so far this year.

The index rose earlier in the day after Bank of England officials reaffirmed monetary policy would remain accommodative for some time. It also tracked the U.S. market, where on Thursday the Dow Jones Industrial Average closed above 16,000 for the first time.

Technical analysts said the FTSE's downside potential was limited and it could climb to a record high in the longer term.

"We expect that the downside potential is just limited to 6,600, from where we should see a continuation of the October rally," said Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking.

"On a monthly chart, the FTSE 100 recently broke the longer-term falling trendline from its 1999 highs, suggesting it is building momentum to make a record high in the coming months."

In other sharp movers, Whitbread rose 3 percent and William Hill 0.8 percent on analyst upgrades. Tullow Oil gained 0.3 percent after reporting an oil discovery in Kenya.

Some analysts said shares could trade in a tight range in the near term and investors would need to be selective.

"I look for stable companies with good balance sheets and reliable dividends and am sticking with the big blue-chip names at the moment," Whitehead of Redmayne-Bentley said. "Stocks like Morrison Supermarkets, Unilever and Royal Dutch Shell are looking quite attractive."

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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