Weak drink stocks push down UK's FTSE 100 index

Tue Nov 26, 2013 7:03am EST

* FSTE 100 down 0.4 pct in mid-session trade

* Remy profit warning hurts SAB Miller and Diageo

By Sudip Kar-Gupta

LONDON, Nov 26 (Reuters) - Britain's benchmark equity index fell on Tuesday, pulled down by major drink stocks such as SAB Miller and Diageo on signs of slowing consumer demand in China.

Nevertheless, many traders still said any weakness in the stock market in November would be followed by a rally in December that could push the index back to its 2013 peaks.

The blue-chip FTSE 100 index was down by 0.4 percent, or 29.08 points, at 6,665.54 points in mid-session trade.

SAB Miller and Diageo together took the most points off the FTSE 100 after a profit warning at French peer Remy Cointreau , which slumped 11.7 percent after warning of a slowdown in China.

"The Remy Cointreau warning is telling you that China is slowing, and while Diageo said everything was fine when their own numbers came out, a week or so ago they took a slightly more cautious stance," said Nick Xanders, who heads up European equity strategy at BTIG.

"The beverage space is really tough, and it's those names that are underperforming the broader market," he added.

The FTSE 100 remains up by 13 percent since the start of 2013. It reached a 5-month peak of around 6,800 points in late October and had earlier hit a 13-year peak of 6,875.62 points in late May.

APS Alpha technical strategist Adrian Slack said the FTSE 100 would recover to rise in December.

Slack said the FTSE should be able to get back to the 6,800 level in December and added that if it rose above that, it could then challenge the 7,000 point level by the end of 2013, which would represent an all-time high for the index.

"There should be a bit of a rally into the year-end. There's still money to come in at the sidelines," he said.

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