* FTSE 100 down 1.2 pct
* Hargreaves Lansdown hit as MS cuts price target
* ARM and Sage suffer in wake of Nasdaq sell-off
(Updates with closing prices)
By Tricia Wright
LONDON, April 11 Technology stocks tumbled on
Friday as Britain's benchmark equity index fell alongside global
markets, suffering its biggest weekly loss in a month.
Financial services and investment management group
Hargreaves Lansdown was among the top FTSE 100 fallers,
off 5.1 percent. Traders said the shares fell after Morgan
Stanley cut its price target for the stock.
The investment bank cut the target price to 1,495 pence from
1,670 pence and said in a note that pressure on pricing and
weaker net interest income will weigh on Hargreaves Lansdown's
earnings over the coming year.
The blue-chip FTSE 100 index closed down 80.27
points, or 1.21 percent, at 6,561.70 points. The index is down
about 2.8 percent this year, despite getting close to its best
level since early 2000 in January.
Technology companies ARM and Sage were among
the worst-performing stocks on the FTSE. Their declines came
after a 3.1 percent slump overnight on the U.S.
technology-dominated Nasdaq index.
ARM, whose chip designs feature in most smartphones, fell
4.5 percent in relatively brisk trading. Software developer Sage
declined 2.1 percent.
"I would leave ARM well alone for now. I'd be happy to see
it drift down to 930 or 910 pence before phasing back into the
stock," said Beaufort Securities sales trader Basil Petrides.
Frothy valuations are keeping investors from putting more
money to work in equities. The FTSE 100 is trading on a 12-month
forward price/earnings ratio of 13.2 times, against its
five-year average of 11 times, Thomson Reuters Datastream shows.
Also acting as a deterrent, analysts have been steadily
lowering profit forecasts for UK companies since the start of
2014, data from Thomson Reuters Datastream shows, a signal of
potential tough times ahead for the index.
"We do think the markets are vulnerable here," said Ian
Richards, global head of equities strategy at Exane BNP Paribas.
"From a micro perspective, we're on valuations above normalised
levels (and) there's an earnings backdrop which is characterised
Revised earnings per share estimates for UK companies over a
rolling three-month period have worsened since late January. The
average estimate has fallen 7 percent in the past three months,
compared with a 3.2 percent drop in the three months to late
January, according to Datastream.
Analysts said the revisions reflected the exposure of many
FTSE 100 companies to emerging markets. The relative strength of
sterling against the euro also cut into UK corporate
(Additional reporting by Sudip Kar-Gupta and Blaise Robinson)