* FTSE 100 down 0.3 pct in morning trading
* Ashmore outflows weigh on asset manager peers
* US pre-announcements add to earnings concerns
By Toni Vorobyova
LONDON, Jan 14 UK stocks retreated on Tuesday,
with news of steep client outflows at Ashmore hitting
other asset management shares and exacerbating concerns about
the strength of the upcoming earnings season.
Ashmore tumbled 11.7 percent, on track for its biggest
one-day drop in five years, after saying volatility in core
emerging markets had spooked investors, who withdrew a net $3.5
billion from its funds in the last three months of 2013.
The drop in mid-cap Ashmore helped push the FTSE 250 down
0.7 percent, and the negative sentiment also
reverberated around its blue-chip peers.
Aberdeen Asset Management, which is due to issue a trading
update on Jan. 16 and which also has a strong focus on emerging
markets, dropped 1.7 percent. Schroders also fell 1.7
percent, while Old Mutual lost 1.2 percent.
"In general it has probably helped moderate expectations for
some of the others that are more exposed to emerging markets -
the likes of Aberdeen and Schroders. It highlights the fact that
clients do consider allocations right up to the year end," said
Stuart Duncan, analyst at Peel Hunt.
Overall, financials were one of the biggest drags on the
blue-chip FTSE 100, taking 6.16 points off the index.
The FTSE 100 itself was down 19.07 points, or 0.3 percent at
6,738.08 points by 1059 GMT, retreating from a two-month closing
high of 6,757.15 points set the previous session.
The weak news from Ashmore generally fed into investor
concerns about whether the quarterly reporting season will be
sufficiently strong to justify the relatively expensive
valuations at which the equity market currently trades.
Such concerns have been fuelled by a string of negative
pre-announcements in the United States, where disappointments
from the likes of SodaStream, Lululemon Athletica
, Express Inc and Aaron's saw the S&P
500 suffer its biggest one-day fall in two months on
"The absence of good news in the fourth-quarter reporting
season is likely to be a headwind for the market," Daniel
McCormack, strategist at Macquarie, said.
"When earnings disappoint, cyclicals, which are more exposed
to that, are going to get hurt more than defensives."
Energy, mining and industrial stocks - which, like
financials, are closely tied to the global economic cycle - were
among the other top fallers.