Basic resources mount retreat as FTSE mines 6-week lows
* FTSE 100 down 50.36 points at 6,544.97
* Commodity stocks fall as US data sparks taper debate
* UK PMIs hit strongest levels in six years
* Retailers rise on UK growth optimism heading into Christmas
* William Hill climbs as UBS ups to "buy"
By David Brett
LONDON, Dec 3 (Reuters) - The FTSE 100's exposure to basic-resources stocks cost it on Tuesday, as miners and oil companies led it lower amid concern that stronger economic data meant equity-friendly monetary policies would soon be scaled back.
Resource stock account for 25 percent of the FTSE 100's weight, and they took 22 points off the index as metals prices fell. Traders pinned the decline in metals to stronger-than-expected U.S. economic data on Monday.
A robust economy usually means better corporate profits and rising stocks. But the recent improving outlook could lead to an early reduction in U.S. Federal Reserve's bond-buying programme, which has supported the rally in equities and curtailed returns from other assets.
"The important risk heading into 2014 is that growth will be too strong. That means we will have a revision in the timing of any interest rate hikes, which is likely to be brought forward," William de Vijlder, said chief investment officer for strategy and partners at BNP-Paribas Investment Partners.
"For investors on a medium-term horizon, the good data is still a relief, but at the margin investors are looking at where they can make money in the short term."
The FTSE 100 was down 50.36 points, or 0.8 percent, at 6,544.97 points at 1127 GMT. The British index has fallen roughly 2 percent over the past month, lagging a small rise for the STOXX Europe 600.
The growing momentum in the UK's economy has also gave investors pause. Sterling reached its highest in more than two years after PMI construction hit its strongest level since August 2007. That indicated forex traders were beginning to price in a rate hike sooner rather than later.
While some sectors stumbled, others benefited as Christmas approached, especially retailers. Their sales could rise in December and into January, traders said, which was reflected in such high-street retailers as Next, Sports Direct and Debenhams, which rose as much as 2.4 percent.
A stronger UK economy also boded well for bookmaker William Hill, according to UBS. Its shares climbed 1.9 percent after UBS upgraded the stock to "buy" and raised earnings forecasts. The betting firm also got a boost after peer Betfair released first-half results.
With economic strength in focus, U.S. jobs reports later this week will be scrutinised, especially the non-farm payrolls report on Friday.
Markus Huber, a senior trader at Peregrine & Black Capital, believes the better economic environment will help the FTSE rally to 6,900 points by mid-2014 and to 7,150 points by the end of next year.
"I think good economic data is overall positive for stocks, mainly because I think the Fed will only take drastic steps once a sustained improvement in the economy is visible," Huber said.
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