* FTSE 100 down 0.4 pct in light volume
* Intertek hit by concerns over outlook
* Technical support levels at 6,613, 6,607, 6,565
* EasyJet rises as it powers ahead of Ryanair
By Tricia Wright
LONDON, Nov 19 Britain's top share index slipped
on Tuesday, hurt by testing firm Intertek on worries
over a slowdown in its business, though analysts were confident
that technical support would cap any weakness in the broader
Intertek, a company specialising in safety and quality
tests, fell 2.5 percent after saying headwinds experienced in
the first half of the year have continued into the second half.
Shore Capital kept a "sell" recommendation on Intertek,
arguing that the company may have more downgrades to forecasts.
The FTSE 100 closed down 25.45 points, or 0.4
percent, at 6,698.01 points, retreating further from a
five-month high of 6,819 hit on Oct. 30. Volumes were light,
with the index having traded just over three-quarters of its
90-day daily average.
"Any downward drift I think is going to be a buying
opportunity. You've got layered support," Lynnden Branigan,
analyst at Barclays Capital, said, referring to the November low
at 6,613, the 50-day moving average at 6,607, and the 100-day
moving average at 6,565.
Valuations on UK equities are still above long-term
averages, having gained nearly 14 percent in 2013 on huge
quantities of cash pumped into the financial sector by central
banks. The FTSE 100 now trades on a 12-month forward
price/earnings ratio of 12.7 times, above its 10-year average of
12 times, Thomson Reuters Datastream shows.
This is despite downbeat corporate results. Nearly
two-thirds of European firms have missed revenue expectations in
the current quarter, while 48 percent have missed forecasts at
the profit level, Thomson Reuters Starmine shows.
Some analysts believe that in 2014 the main driver for
stocks will be a further improvement in the global economy
rather than rising valuation multiples.
"I think that in 2014 it will not be price/earnings ratios
that will take the lead but fundamentals, and I shall compare it
with a cocktail with a little bit less alcohol and with better
ingredients, so it's much more stable," said Patrick Moonen,
senior multi-asset strategist at ING Investment Management.
He said that cyclical sectors still have further room for
Budget airline easyJet jumped 7.1 percent after it
underlined its growing advantage over struggling Irish rival
Ryanair, reporting annual profit at the top end of
forecasts and returning cash to shareholders.
And engineer Amec rose 1.5 percent after saying
trading had been boosted by strong performances in the UK North
Sea and the U.S. Gulf of Mexico.
George Godber, who runs Miton Group's UK Value Opportunities
Fund, said valuations in the market have become stretched but he
too sees opportunities in cyclicals, namely from miners boosted
by ambitious economic reform plans in top metals consumer China.