* FTSE 100 down 2 pct, testing support
* Index set for biggest fall since June 2013
* Geopolitical concerns hurt cyclicals like banks
* Gold miners rally, copper firms hit by China data
By Alistair Smout
LONDON, March 3 Britain's top share index fell
to a two-week low on Monday, set for its biggest fall in over
eight months as investors' appetite for riskier assets fell due
to the increasingly tense situation in Ukraine.
Banks, insurers, mining and energy stocks were among the big
fallers after Ukraine mobilised for war following Russian
President Vladimir Putin's declaration that he had the right to
invade his neighbour. The confrontation over Ukraine is the most
serious between Moscow and the West since the Cold
"I was already bearish in the near-term, and the situation
in Ukraine is supporting this view, Fawad Razaqzada, technical
analyst at Gain Capital, said, adding that a close below the
6,700 level would suggest further falls in coming sessions.
"This is a key level of support, as previously it was
resistance, and we have the 50-day moving average there as well
as the 38.2 percent retracement of the rally from early
February," he said, referring to a Fibonacci "golden ratio" that
chartists use to analyse the likely depth of a pullback.
The FTSE 100 was down by 132.80 points, or 2
percent, at 6,676.90 by 1142 GMT, set for its biggest daily fall
since last June.
Only five stocks were in positive territory, with precious
metal miners Randgold and Fresnillo the top
risers, benefiting from a flight to safety that boosted the gold
Companies with direct exposure to Russia were the hardest
Oil major BP, which has a significant stake in
Russia's biggest oil producer Rosneft, fell more than
2 percent, alone trimming 8 points off the index, on concerns of
an escalation in tensions.
Rosneft shares slumped more than 8 percent.
"Clearly the market is in a risk-off mode on the back of the
geopolitical developments, the most concerning for Europe since
the end of the cold war. All eyes will be on whether it
spreads," said Daniel McCormack, strategist with Macquarie.
"But I doubt that there will be a major sell-off as a result
of this. It appears that the West is not going to intervene
militarily, so this escalating into a full-blown war is very
Gold miners aside, miners suffered. The UK mining index
fell 2 percent, hurt by geopolitical concerns and
weakness in copper, which slipped on data showing a further drop
in factory activity in China, the world's top metals consumer.
The final Markit/HSBC manufacturing Purchasing Managers'
Index (PMI) for China fell to a seven-month low of 48.5 in
February from January's 49.5, its third straight monthly
decline, reinforcing concerns of a slowdown in the world's