* FTSE 100 index falls 0.5 percent
* Mining stocks hurt by metals demand concerns
* Vodafone drops on Verizon's bid denial
* Chartists remain positive, support seen at 6,350
By Atul Prakash
LONDON, April 3 Britain's top share index
retreated on Wednesday, pulled down by worries about the global
economy which hit mining stocks and by a drop in Vodafone
after Verizon denied making a bid.
Miners tracked a drop in metals prices, with copper
falling to an eight-month low, after weak manufacturing data
from the United States and Europe this week.
The UK mining index fell 1.8 percent to feature
among the top decliners, with ENRC, BHP Billiton
and Xstrata falling by between 2.4 to 6 percent.
Miners were also pressured by a target price cut by Credit
"Our view is that with Western central banks in supportive
mode, any pull-back will prove temporary and likely bought into
by investors still seeking the returns clearly absent from other
traditional savings-based products," said Jeremy Batstone-Carr,
head of private client research at Charles Stanley.
At 1138 GMT, the blue-chip FTSE 100 index was down
31.11 points, or 0.5 percent, at 6,459.56, after gaining in the
last two sessions.
Heavyweight Vodafone took the most points off the index
after its joint venture partner Verizon Communications sought to
end to rampant bid speculation by saying it did not plan to buy
the British group.
Vodafone shares fell 2 percent. However, analysts remained
positive on the stock.
"Holders shouldn't be too concerned at the lack of deal
talks confirmation," Mike van Dulken, head of research at
Accendo Markets, said.
"If anything, intensification of recent market talk just
serves to highlight, potentially even increase, the perceived
value of the U.S. wireless joint venture. Given this represents
Vodafone's most valuable asset ... this likely underpins the UK
giant's share price in the near term."
The potential sale of the $115 billion stake has driven
Vodafone shares up about 25 percent since the start of the year.
"The turnaround in Vodafone has clearly not helped the
market, with rising tensions in Korea also providing some
investors with reasons to take profits," Keith Bowman, equity
analyst at Hargreaves Lansdown, said.
"For now, defensive yield-generating sectors still remain in
focus, although other selective cyclical sectors such as
airlines continue to attract attention."
Technical analysts remained positive on the index's outlook
as it recently rallied from the uptrend line drawn from its
"The market is still in an uptrend and we just have to stay
with it," said Dominic Hawker, technical analyst at Westhouse
Securities. "Even if the index breaks its immediate support of
6,350 and falls to 6,100, we would still be in the medium-term
uptrend," he said, adding the index would face strong resistance
at its 2007 peak of 6,750.
Among sharp gainers, diversified miner Vedanta Resources
advanced 4.3 percent after India's top court reversed an
earlier order by a court to close its Tuticorin smelter.
(Reporting by Atul Prakash; Editing by Ruth Pitchford)