* Ex-dividends take around 20 points off index
* FTSE 100 down 0.7 pct, around 1-month low
* Chinese credit concerns hit mining stocks
By Sudip Kar-Gupta
LONDON, March 12 Britain's top equity index fell
on Wednesday to hover around a one-month low as heightened
concerns over the credit market in China, the world's top metals
consumer, hit the mining sector for the fourth straight session.
The blue-chip FTSE 100 index, which had already
fallen in the last three sessions, was down by 0.7 percent, or
48.78 points, at 6,636.84 points in early session trading.
A host of companies, including major banks HSBC and
Standard Chartered went ex-dividend on Wednesday.
Investors who buy a stock on or after its ex-dividend date
are not entitled to the dividend payment, and the companies
going ex-dividend had the technical impact of taking some 20
points off the FTSE 100 index.
However, a fall in mining stocks also weighed on the market,
with the FTSE 350 Mining Index declining for the
fourth day in a row to trade 1.1 percent lower.
The sector was hit after the price of Shanghai copper fell
by its five percent daily limit while the price of London copper
hit a 44-month low on growing concerns about credit-linked
defaults in China.
A bond default last week by a Chinese solar company
reignited concerns about a possible economic slowdown in China,
which in turn has hit metal prices and mining stocks.
"China steel rebar prices have reached new lows. We see this
data as a reliable indicator of a potential softening in
underlying demand for steel in China," Morgan Stanley analysts
wrote in a research note.
The FTSE 100 rose 14.4 percent in 2013 to record its best
annual gain since 2009. It also reached peaks that marked its
highest level in around 13 years in early January this year and
in late May 2013 that were in the 6,867-6,875 point range.
Although the UK stock market has been propped up by a
gradual recovery in the British economy, some traders expected
the FTSE to remain under pressure in the near-term, with the
index down 1.6 percent since the start of 2014.
"It looks like this correction is set to continue," said
Hantec Markets analyst Richard Perry, who said the FTSE could
fall below the 6,600 point if it broke below the 6,608 point
level, which marked an intraday low in February.