(Corrects FTSE 100 closing level in para 3)
* FTSE 100 ends 0.5 pct lower after setting 2-wk low
* Retailer Sports Direct falls more than 9 pct
* FTSE falls below key moving average levels
By Atul Prakash
LONDON, April 8 Britain's blue chip share index
hit a two-week low on Tuesday, with Sports Direct leading losses
after a share sale by founder Mike Ashley and technicals
pointing to a bearish market outlook in the near term.
Sports Direct, Britain's biggest sporting goods
retailer, slumped 9.2 percent after Ashley sold 25 million
shares, while financial stocks were also hard hit on concerns
about earnings and valuations.
The blue-chip FTSE 100 index ended 0.5 percent
weaker at 6,590.69 points after touching its lowest since late
March at 6,549.75. It added to a 1.1 percent loss on Monday.
The near-term technical outlook became bearish after the
index fell below its 50-day and 100-day moving averages on
Monday and slipped below its 200-day moving average on Tuesday.
"With the daily momentum indicator turning down, we continue
to expect further bottoming and a re-test of the last low at
6,492 or even a final washout towards 6,400," Michael Riesner,
head of equities technical analysis at UBS, said.
"With good buying support expected above 6,400, a pullback
into deeper April would offer a tactical opportunity to buy."
The market was pressured by a sell-off in insurance and
banking shares. Investors took a cautious stand in the near term
ahead of the earnings season and on concerns about valuations,
lingering geopolitical concerns and growth prospects.
According to StarMine Smart Estimates, UK financial
companies are expected to report a near 13 percent drop in
earnings in the first quarter from the same period a year ago.
Financials were the worst hit, with Lloyds down 2
percent, Barclays down 1.3 percent, Resolution
falling 3.8 percent and Prudential dropping 1.5 percent.
Insurers also slipped in a knee-jerk reaction to news that
Britain's insurance industry had urged its regulator to hold a
fully independent inquiry into how news of a review into the
sector was released. The news added to uncertainty about
regulatory scrutiny of the sector.
Shares in the sector tumbled on March 28 after the Financial
Conduct Authority told a newspaper it was reviewing part of the
industry, raising fears that profitability would be hit.
"The insurance sector as a whole has come under scrutiny
over the course of recent weeks because of regulatory concerns.
Investors are already a bit worried and this kind of news adds
to uncertainty and concerns," said Peter Dixon, economist at
Among other sharp movers, food and fashion conglomerate
Associated British Foods fell 3.9 percent, with traders
attributing ABF's fall to a profit warning on Tuesday by German
sugar producer Suedzucker.
According to Thomson Reuters StarMine data, Associated
British Foods is on a price to earnings per share (P/E) ratio of
25.9 for the next 12 months - giving it a higher rating than
similar P/E ratios of 12.7 for rival Tate & Lyle and
18.3 for France's Danone.
"We believe ABF is simply overvalued," said JNF Capital
investment manager Ed Smyth.
(Additional reporting by Sudip Kar-Gupta; Editing by Susan