UK FTSE suffers worst weekly losing streak since 2008
* FTSE flat at 6,448.05 points
* On track for 6th weekly loss, weakest streak since 2008
* Commodity exposure, strong sterling hit index
* RSA hit by profit warning and CEO's departure
By Francesco Canepa
LONDON, Dec 13 (Reuters) - Britain's main share index was bracing for its longest streak of weekly losses since 2008 as it traded flat on Friday, held back by a selloff in insurer RSA .
The FTSE 100 was down 1.6 percent for the week, its sixth consecutive decline, as concerns about a tightening of U.S. monetary policy and a stronger pound clouded the outlook for the many globally exposed companies in the British index.
The selloff has been a relatively shallow one at 4.4 percent, leaving the FTSE still up roughly 9 percent for the year. In comparison, the STOXX Europe 600 is up 11 percent this year and Spain's Ibex is up 13 percent.
Basic material stocks, which account for a tenth of the index's weight and have fallen roughly 8 percent in the past six weeks, are responsible for part of the FTSE's recent misfortune as the prospect of less easy money from the Federal Reserve and a stronger dollar depressed metal prices.
"The UK is a much more commodity-biased market than (continental) Europe," said Alan Higgins, chief investment officer at Coutts, which owns shares in miner Rio Tinto and BHP Billiton based on their depressed valuations, falling capital spending and high dividend yield.
"In general, we prefer the continent to the UK. That's because of the translation effect of sterling and it's just that continental Europe, especially some of the beaten up markets, are doing catch up."
The FTSE 100 index was up 2.80 points, flat in percentage terms, at 6,448.05 at 1602 GMT after hitting its lowest level since around mid-October at 6,434.07 in early deals.
Clipping the index's wings was insurer RSA, which slumped 8.5 percent and briefly hit its lowest level since around mid-2005 after its chief executive resigned following its latest profit warning.
Volume on the stock was nearly ten times its full-day average for the past three months, compared to 75 percent of the average for the FTSE.
"This is clearly a very disappointing announcement for the company leading to uncertainty about profitability, capital levels, dividends and strategy," said Oriel Securities analyst Marcus Barnard.
Chip-maker ARM Holdings rallied 3.4 percent, with traders citing a Bloomberg report suggesting that Google is considering making its own server processors using technology from the British chip maker.
"If they (Google) do start making their own server chips, that would put upward pressure on the royalty shipments for ARM in due course," said Julian Yates, who covers the company for Investec.
The main focus for equity investors is whether the U.S. Federal Reserve may scale back its economic stimulus measures and signal an earlier-than-expected interest rate hike when it meets next week.
While most investors still don't expect it to start tapering its economic stimulus programme until March next year, some believe it could begin this month.
This uncertainty has led some investors to trim back equity holdings this month in order to book profits on the year's gains.
"You could see a situation where equities react negatively at the beginning and then will rally again," Saker Nusseibeh, chief executive officer of Hermes Fund Managers, said.
"Interest rates (will be) going up a little bit because the situation in the economy is a bit better so earnings are a better."
- Radar showed missing plane may have turned back: Malaysia military
- Malaysian jetliner may have turned back before vanishing |
- Malaysian plane presumed crashed; questions over false IDs |
- Russian forces tighten grip on Crimea despite U.S. warning |