* FTSE 100 down 0.6 pct after hitting lowest point since
* Set for second straight weekly loss
* U.S. aircraft starts strikes against Iraqi militants
* Asset managers lead declines as investors fret about
By Francesco Canepa
LONDON, Aug 8 Britain's top equity index was set
for a second straight weekly loss as it fell on Friday, with
U.S. air strikes in Iraq adding to an already gloomy
geopolitical and economic landscape.
U.S. aircraft dropped 500-pound laser-guided bombs on
Islamic State artillery, only hours after President Barack Obama
authorised air strikes to protect Christians and avert "a
potential act of genocide".
The development added to worries about conflicts elsewhere
in the Middle East and in Ukraine, which, together with weak
European economic data and the prospect of monetary tightening
in the United States, have knocked back global stock markets
over the last month.
"I have backed off from buying on the dips at the moment,
mainly because market moves are being fuelled by more
geopolitical news and therefore harder to call and read than the
technical, market-driven bounces," said Ed Woolfitt, head of
trading at Galvan.
"I am keeping most of the powder dry and waiting to play the
larger run back up once it has settled."
The blue-chip FTSE 100 index was down by 0.6
percent, or 40.05 points, at 6,557.32 by 1417 GMT, down 1.8
percent for the week after a 1.7 percent fall the previous week.
The index set its lowest mark since mid-April at 6,528.73
points earlier in the day before briefly trimming losses when a
Russian official said Moscow would continue efforts to
de-escalate the Ukraine crisis.
Traders said the FTSE could find buyers coming in if it fell
down to around 6,500 points, where it also bottomed out in March
"If we hammer out a base of support there and news flows
ease, then I shall participate more in the recovery," Galvan's
Asset manager Schroders, down 3 percent, led
declines as investors worried that the current market volatility
would affect its performance and result in clients withdrawing
Mid-cap fund manager Henderson Group and hedge fund
MAN Group fell 2.6 percent and 2.2 percent respectively.
U.S. funds investing in European equities suffered their
longest streak of outflows in three years in the seven days to
Aug. 6 as they bled money for the eighth consecutive week,
Lipper data showed.
"The market is going down and these are heavily geared plays
on the market," said Jason Streets, an analyst at Jefferies &
"Not only are they linked to the market in terms of
management fees, but flows tend to follow the market too."
(Additional reporting by Sudip Kar-Gupta; Editing by Kevin