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British shares fall to 1-month low, ARM slumps
June 3, 2013 / 4:51 PM / 4 years ago

British shares fall to 1-month low, ARM slumps

* FTSE 100 falls 0.9 pct on global growth concerns
    * ARM slumps 7 pct as Cortex A-12 fails to convince

    By Sudip Kar-Gupta
    LONDON, June 3 (Reuters) - Britain's benchmark share index,
which hit near 13-year highs in May, fell to a one-month low on
Monday as a global equity pullback deepened over signs of
weakness in the world economy.
    The blue-chip FTSE 100 index closed down by 0.9
percent, or 57.97 points, at 6,525.12 points - its lowest
closing level since ending at 6,521.46 points on May 3.
    Chip designer ARM was the worst-performing FTSE 100
    It slumped 7 percent after analysts voiced doubts over
whether Cortex A-12, its new processor for smartphones, would do
enough to assuage concerns over the firm's competitive position
and high stock price valuation. ARM hit 12-year highs in
    "We do not expect the Cortex A-12 to make a meaningful
difference to ARM's outlook," brokerage Liberum wrote in a
research note, keeping a "sell" rating. 
    The FTSE and other stock markets were hit by weak
manufacturing data from the United States and China, which
raised doubts over the global economy. 
    Some investors have used such weak data as a sign to buy
into shares, on expectations that economic weakness will mean
the U.S. Federal Reserve and other major central banks will
continue with their stimulus programmes.
    The programmes have hit yields on bonds and driven investors
to the better returns available from equities, helping drive a
stock market rally this year.
    But traders said investors were now focusing on the negative
data as an excuse to book a profit on the rally, rather than
using it as a bullish signal heralding more central bank aid. 
    Some traders expect any market pullback in June and July to
be relatively shallow and short-lived, and for equities to
resume an upwards trajectory towards the end of the year.
    But both EGR Broking managing director Kyri Kangellaris and
MB Capital trading director Marcus Bullus advised against buying
into the FTSE at current levels on expectations it could fall
    Bullus said the FTSE, which has risen around 11 percent
since the start of 2013, could be vulnerable to falling to
6,250, which represents low points reached in February and
    "We're not looking to go against the trend for the moment,"
he said.

 (additional reporting by David Brett; Editing by John

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