July 10, 2014 / 3:10 PM / in 4 years

Financial-services firms lead FTSE lower in broad-based slump

* FTSE 100 drops 0.7 pct
    * Hargreaves Lansdown, Ashtead lead decline
    * LSE sinks after Qatar reportedly sells a stake
    * Burberry gains after strong update

 (Updates prices, adds quote)
    By Alistair Smout
    EDINBURGH, July 10 (Reuters) - The UK's top share index fell
on Thursday as investors abandoned  equities for safe-haven
assets, hurting financial-services firms and driving the index
through important technical levels.
    Financial services declined the most. Losses by banks, fund
managers and insurance firms combined to account for around a
third of the total decline on the FTSE 100.
    "The financial sector is leading declines with almost every
FTSE 100 financial stock in the red," said Jasper Lawler, a
trader at CMC Markets. Concerns over Portugal's largest listed
bank, Banco Espirito Santo, had spread across Europe,
he said. 
    The FTSE 100 index was down 47.76, or 0.7 percent,
at 6,670.28 points, taking its losses this week to nearly 3
percent, as poor economic data and concern over banks in Europe
knocked the index below its 200-day moving average around 6,685.
    "That 6,700 from a psychological point of view was giving it
a bit of confidence, and with the 200-day moving average around
there as well, we were looking for some support," said Alistair
McCaig, a market analyst at IG. "When that didn't transpire and
we have broad weakness across Europe, it's a risk-off day on the
FTSE 100." 
    Fund managers Hargreaves Lansdown and Ashtead
 led the index lower, as traders put money into assets
such as gold rather than riskier investments such as stocks.
    The recent slide on the FTSE 100 has seen it drop through
its 20-, 50- and 100-day simple moving averages in a significant
sign of weakness, analysts said.
    London Stock Exchange fell 4 percent after sovereign
wealth fund Qatar Holding sold 260.1 million pounds ($443
million) of LSE shares at 1,915 pence each, a source familiar
with the matter said.
    The FTSE did manage to outperform other indices in Europe,w
which were led down by peripheral euro zone countries. Weak
economic data from Italy and mounting concern about the
stability of Portugal's largest listed bank weighted on the
shares in the periphery. 
    Helping to support the FTSE was luxury brand Burberry
. It rose 2.5 percent after it posted a quarterly 12
percent rise in like-for-like retail sales, which traders called
a very strong result.   
    "In the face of concerns about fading growth in the sector,
Burberry continues to perform well above average," Luca Solca,
analyst at Exane BNP Paribas, said in a note. "The brand
maintains strong momentum in all product categories and greatly
benefits from its pioneering engagement in digital."
    ($1 = 0.5877 British Pounds)

 (Editing by Larry King)
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