* FTSE 100 drops 1.4 pct
* Geopolitical concerns hurt fund managers, banks most
* Index tests support around 6,700
* 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, led down by asset management firms
as stocks most exposed to emerging markets fell on increasing
tensions in Ukraine.
The possibility of war between Russia and Ukraine hit stocks
that are particularly sensitive to optimism over global markets,
such as fund managers Schroders and Aberdeen Asset
Management, which fell 4.6 percent and 3.9 percent
Banks, insurers, mining and energy stocks were other big
losers 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
Volatility, an indicator of investor fear, spiked by 24.8
percent, and companies with direct exposure to Russia -
including BP - were the hardest hit.
"The complex situation in Ukraine brings potential for
heightened volatility in the near term amid concerns of an
escalation into a wider conflict," Alan Higgins, UK chief
investment officer at Coutts, said.
"Our central scenario is that a wider conflict will
ultimately be avoided... As such, our 6-12 month views remain
unchanged," he said.
Oil major BP, which has a significant stake in Russia's
biggest oil producer Rosneft, fell 1.7 percent, alone
trimming nearly 7 points off the index.
Rosneft shares slumped by as much as 8 percent.
The FTSE 100 was down by 96.97 points, or 1.4
percent, at 6,712.73 by 1528 GMT, holding just above the 6,700
level seen as significant by technical analysts.
"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. A close below 6,700 would suggest
further falls in coming sessions, he said.
"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.
Only five stocks were in positive territory, with precious
metal mining companies Randgold and Fresnillo
the top risers, benefiting from a flight to safety that boosted
the gold price.
Shares in miners of other metals 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
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