* FTSE 100 down 0.6 pct
* Outlooks from Rolls Royce, Tate & Lyle and Lloyds
* UK benchmark looks vulnerable, currently testing 50-day MA
By Tricia Wright
LONDON, Feb 13 Britain's top share index fell on
Thursday after six straight days of gains, its longest rising
streak of the year, led down by food ingredients firm Tate &
Lyle and engineer Rolls Royce, which gave disappointing
Tate & Lyle lost the most in percentage terms, down
16.2 percent after it scaled back its full-year outlook, citing
weak sales volume in developed markets.
Fellow European consumer staple Nestle also fell
after giving a caution on outlook, further denting sentiment
towards the sector, with the FTSE 350 Food producers
1.6 percent weaker.
Rolls Royce, down 15.3 percent, took the biggest
chunk out of the FTSE - knocking 13.3 points off the index.
Although the engineer's profit rise beat forecasts, its
outlook was disappointing, saying it expected 2014 profits to be
flat on the back of declining defence and marine revenues.
The downgraded outlooks cast doubt on a much hoped-for
earnings recovery this year, which many analysts are depending
on to fuel strong stock market gains this year.
Of FTSE 100 companies that have reported quarterly earnings
so far, 39 percent have missed profit expectations.
"I thought we were probably going to have to beat earnings
just to hold steady on the FTSE 100, so given the misses we're
seeing, I'm not surprised we're lower," said Toby Morris, senior
sales trader at CMC Markets.
"We got ahead of ourselves at the back-end of last year, and
reports are going to be scrutinised a lot more," he said, citing
the banking sector as under particular pressure.
The FTSE 100 was down 42.74 points, or 0.6 percent,
at 6,632.29 points by 1526 GMT.
The UK benchmark had staged a 4 percent rally from early
February lows until Wednesday's close, recouping more than half
of a rout since late January on political and economic concerns
in emerging markets.
The index tested the 6,680-6,700 range on Wednesday, a
former area of support corresponding to 61.8 percent of the
Fibonacci retracement down from the January high.
Technical analysts sounded a note of caution, seeing scope
for this range to turn into resistance, at least in the
short-term, and indeed for the FTSE 100 to see more losses.
"The index is currently testing the 50-day moving average
(6,633) as support, a closing break below which could pave the
way for the 200-day average at (6,567)," said Fawad Razaqzada,
technical analyst at FOREX.com.
Lloyds fell 3.5 percent even after its return to
profit, with traders citing disappointing guidance for the bank,
media scrutiny over its bonuses and a strong run-up which saw it
hit five-year highs in January after gaining 65 percent in 2013.
"The regulatory environment remains austere, the level of
competition in the industry is increasing and the ongoing growth
in the return on capital number will remain under pressure,"
said Richard Hunter, head of equities at Hargreaves Lansdown.