July 10, 2014 / 11:26 AM / 4 years ago

Financial firms lead FTSE lower in broad-based slump

* FTSE 100 drops 0.9 pct
    * Hargreaves Lansdown, Ashtead led fallers as stocks shunned
    * LSE sinks on reported Qatar stake sale
    * Burberry gains after strong update

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    By Alistair Smout
    EDINBURGH, July 10 (Reuters) - The UK's top share index fell
on Thursday as investors shunned equities in favour of
safe-haven assets, hurting financial services firms and driving
the index through important technical levels.
    The FTSE 100 index was down 0.9 percent at 6,658.39
points, taking its losses this week to more than 3 percent, as
poor economic data and concerns 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 with the 200 day moving average
around there as well, we were looking for some support,"
Alistair McCaig, market analyst at IG, said.
    "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, seen as more reliable in financial uncertainty,
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 say.
    "The FTSE is looking much more bearish recently... The
warning signs are there that we may be about to see a bigger
correction," Alpari analyst Craig Erlam said. 
    London Stock Exchange fell 3 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.
    However the FTSE did manage to outperform steeper falls in
Europe, led down by peripheral euro zone countries after weak
economic data from Italy and mounting concern about the
financial health of Portugal's largest listed bank.
    Helping to support the FTSE was luxury brand Burberry
, up 1.8 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 Andrew Heavens)
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