* FTSE closes down 0.9 percent at 6,636.22 points
* Remy profit warning hurts SAB Miller and Diageo
* Most traders still expect year-end rally
* FTSE 100 still up around 13 pct since start of 2013
By Sudip Kar-Gupta
LONDON, Nov 26 Britain's benchmark equity index
fell on Tuesday, pulled down by major drinks stocks such as SAB
Miller and Diageo on signs of slowing consumer
demand in China.
But many traders said that any market weakness 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 closed down by 0.9
percent, or 58.40 points, at 6,636.22 points. Trading volumes
came in at about 1.5 times above the average 90-day volume for
SAB Miller fell 2.4 percent while Diageo fell 1.6 percent
after a profit warning at rival Remy Cointreau, which
pointed to a slowdown in China.
Together, SAB Miller and Diageo took the most points off the
"The Remy profit warning left SAB Miller and Diageo licking
their wounds," Sucden Financial trader Andrew Crook said.
Tim Gregory, head of global equities at Psigma Investment
Management, argued that even though the drinks sector faced
near-term challenges, its longer-term outlook was more robust.
Many analysts expect drinks groups to gradually cash in on
rising consumer demand in areas such as China and India.
"Although there are clearly short term headwinds for the
high-end spirits market, the long-term opportunity for the
industry is still strong, so we would see any short-term
weakness in stocks like Diageo as an opportunity to buy the
shares," said Gregory.
The FTSE remains up by around 13 percent since the start of
2013. It reached a five-month peak of around 6,800 points in
late October, having hit a 13-year peak of 6,875.62 points in
late May, helped by a gradual recovery in the British economy.
"We're still expecting a year-end rally, but we won't buy
unless it either falls to 6,600 points or if it holds above
6,700," Logic Investments director of trading Darren Easton
APS Alpha technical strategist Adrian Slack also expected
the FTSE to get back to the 6,800 level in December.
Slack said 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.