FTSE down as U.S. data hits momentum

By David Brett

LONDON (BestGrowthStock) – Weak U.S. housing data helped push Britain’s top shares lower on Monday, as cautious investors trimmed positions in riskier assets, while BP (BP.L: ) fell after leaks were discovered in its capped well.

The FTSE 100 (.FTSE: ) closed down 10.57 points, or 0.2 percent, at 5,148.28, having shed 1 percent on Friday.

The index’s fall echoed a retreat on Wall Street after data from the United States revealed that the homebuilder sentiment index fell in July to the lowest level in more than a year, sparking new fears about the pace of a recovery.

The data offset upbeat corporate news from Halliburton Co (HAL.N: ) and Boeing Co (BA.N: ).

“It shows sentiment remains fragile but it is by no means a disaster. We keep getting told this is going to be an uneven recovery and the data we are seeing is proving it,” said Jimmy Yates, head of equities at CMC Markets, who sees the FTSE 100 finishing around the 5,300 level by the year end.

BP (BP.L: ) shed 4.7 percent and took 14 points off the index as engineers monitoring its damaged well in the Gulf of Mexico detected seepage on the ocean floor that could mean problems with the cap that has stopped oil from gushing into the ocean.

“It’s worrying, it’s just what investors didn’t want to see. There are horrendous possibilities for the company that has unlimited liabilities,” said David Morrison, market strategist at GFT Global.

The oil firm has lost over 40 percent in value since the leak started in April.

A broker downgrade weighed on Associated British Foods (ABF.L: ), off 2.4 percent, with Evolution Securities cutting its rating on the Primark fashion stores owner and Silver Spoon sugar refiner to “neutral” from “buy.”

Knowledge management software firm Autonomy Corp. (AUTN.L: ) and microchip designer ARM Holdings (ARM.L: ) were among the top fallers, down 1.6 and 1.0 percent, respectively, ahead of earnings from U.S. technology firms IBM (IBM.N: ) and Texas Instruments (TXN.N: ), due to report in the U.S. later on Monday, and Apple Inc (Read more about Apple stock future.) (AAPL.O: ) on Tuesday.

In a sign that the domestic UK economy is facing stiff headwinds, asking prices for British homes fell for the first time this year in July, the property website Rightmove showed on Monday.

BANKS FIRM

Banks remained in positive territory although they pared earlier gains following the U.S. housing data, as investors remained upbeat ahead of the results of the stress tests on Europe’s banks, with Standard Chartered (STAN.L: ) the best performer, putting on 2.0 percent.

Miners rebounded after falls the previous week, against a backdrop of firmer metals prices, with Xstrata (XTA.L: ), Rio Tinto (RIO.L: ) and Vedanta Resources (VED.L: ) adding between 1.1 and 1.5 percent.

International Power (IPR.L: ) was the top riser on the index, up 10.5 percent after the company said it had revived talks on a possible tie-up with France’s GDF Suez (GSZ.PA: ).

And on the second tier (.FTMC: ), Tomkins (TOMK.L: ) soared almost 28 percent after the engineering firm said it had received a bid approach at 325 pence per share from a consortium of Onex (OCX.TO: ) and the Canada Pension Plan Investment Board.

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 (Editing by Simon Jessop)

FTSE down as U.S. data hits momentum