* FTSE 100 index falls 0.2 percent in choppy trade
* Severn Trent drops 7.8 percent as bidder walks away
* Vodafone down, makes takeover bid for Kabel Deutschland
By Atul Prakash
LONDON, June 12 Britain's top share index fell
on Wednesday on growing concerns the U.S Federal Reserve might
start trimming its money printing programme, with Severn Trent
dropping 9.7 percent after a bidder walked away.
The blue-chip FTSE 100 index fell for a third
consecutive day to trade near the previous session's seven-week
intra-day low. At 0816 GMT, the index was down 11.58 points, or
0.2 percent, at 6,328.50 points.
Recent encouraging economic data from the United States has
raised concerns that the Fed could scale down its bond buying
programme, which had helped the index to scale a 13-year high
last month. It has fallen nearly 9 percent since the peak.
"Concerns that markets will slowly have to become accustomed
to reduced stimulus, and in effect liquidity, continue to
emanate. Near term, markets look set to remain highly volatile,"
Hargreaves Lansdown equity analyst Keith Bowman said.
"With the exact outcome of reduced stimulus and the outlook
for global economic health still largely unknown, a strategy of
diversity encompassing both defensive and cyclical arenas, for
now, should be pursued."
The telecom sector was the top decliner, led lower by a 4.7
percent drop in Vodafone. The company, which traded
without entitlements to its latest dividend payout, said it had
made a preliminary takeover bid for Germany's biggest cable
company, Kabel Deutschland Holding.
Utilities shares were hit by a 7.8 percent drop in Severn
Trent after a Canadian-led consortium wooing the company
walked away empty handed. The British water company had refused
to engage in talks before a bid deadline expired.
However, the UK mining index climbed 0.6
percent, as copper and aluminium prices
rebounded and gained 0.5 percent to 0.8 percent.
Mike van Dulken, head of research at Accendo Markets, said
the FTSE 100 index could still fall towards 6,220.
"But it may ultimately prove (to be) a good thing in terms
of clearing the froth from an overdone market, as well as giving
short-term traders a second bite at the cherry should the index
resume its recovery uptrend."
(Editing by Catherine Evans)