FTSE hits 1-month closing low on recovery doubts

* FTSE down 1.5 pct

* U.S. home sales data dampens mood

* Vedanta top faller on India ruling

By Tricia Wright

LONDON, Aug 24 (BestGrowthStock) – Britain’s top share index closed
lower on Tuesday after weak U.S. existing home sales data cast
further doubt on the economic recovery story, with UK banks,
miners and energy stocks bearing the brunt of the sell-off.

The FTSE 100 (.FTSE: ) ended down 78.89 points, or 1.5
percent, at 5,155.95, its lowest close since July 20, having
gained 0.8 percent on Monday.

The UK benchmark closed below 5,187.41, its 38.2 percent
Fibonacci retracement of the peak in April to the low on July 1,
with the next support level at 5,034.72, its 23.6 percent
retracement level.

Existing home sales in the United States for July plummeted
27 percent, a drop that was twice as steep as expected, to an
annual rate of 3.83 million units, far below the 4.7 million
rate forecast by a Reuters poll of economists. [ID:nN24196313]

“We’ve had a raft of bad figures for the last month or so
and the market’s shrugged them off, but the weight of the bad
news has really got too much,” said Mark Priest, senior equities
trader at ETX Capital.

“We’ll probably see more of this,” he added.

Miners (.FTNMX1770: ) and energy stocks (.FTNMX0530: ) were hurt
by lower metals and crude (CLc1: ) prices, as the downbeat U.S.
data reinforced worries about the outlook for demand.

India-focused mining group Vedanta Resources (VED.L: ) was the
standout blue chip faller, off 7.6 percent, after India rejected
its plan to mine bauxite in an eastern state over environmental
concerns. [ID:nSGE67N06M]

The blow comes as Vedanta seeks to buy a majority stake in
Cairn India (CAIL.BO: ) from its UK-based parent Cairn Energy
(CNE.L: ), although India’s trade minister said on Tuesday
state-run Oil and Natural Gas Corp (ONGC.BO: ) should have a say
in the deal.

Cairn Energy fell 4.1 percent after the oil explorer struck
gas in Greenland, which disappointed investors who had hoped for
an oil find. [ID:nLDE67N06V]

Chilean miner Antofagasta (ANTO.L: ) shed 1.5 percent after it
trimmed its annual production target, even though it posted a
near doubling in first-half earnings per share. [ID:nLDE67M1FM]

Global miner Rio Tinto (RIO.L: ), meanwhile, fell 4.3 percent
after a Canadian newspaper linked it and a Chinese partner with
a bid for Potash Corp (POT.N: ), which is fending off a $39
billion hostile bid from BHP Billiton (BLT.L: ). Rio Tinto
declined to comment. [ID:nSYA008290]

Sticking with both heavyweight miners, South Africa’s
National Union of Mineworkers said that its members at a Rio
Tinto-BHP Billiton joint venture will go on an indefinite strike
from Friday following a wage dispute. BHP Billiton was off 1.5
percent. [ID:nLDE67N0BE]

Coal and base metals miner Xstrata (XTA.L: ) dropped 2.9
percent after it announced a $381 million agreed takeover of
Australian-listed Sphere Minerals (SPH.AX: ). [ID:nSGE67N02N]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic on M&A data for August, click on: http://r.reuters.com/dag36n For a Breakingviews column on the state of the stock market please double click on [ID:nLDE67N0KP] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

BANKS WEIGH

Banks (.FTNMX8350: ), closely geared to the overall health of
the economy, were big fallers, with Royal Bank of Scotland
(RBS.L: ) the worst off, down 3.5 percent.

Britain faces the risk of sliding back into recession and
the central bank’s growth forecast for this year and next may be
too optimistic, new Bank of England policymaker Martin Weale
said in an interview with the Times newspaper. [ID:nLDE67N08F]

Concerns about the economy weighed on Wolseley (WOS.L: ), the
world’s largest builders merchant distributor, which has
substantial exposure to the U.S. Its shares shed 5.1 percent.

Irish building supplies giant CRH (CRH.I: ) warned core
earnings would fall 10 percent this year, pointing to mounting
concerns over the economy in the U.S.

WPP (WPP.L: ), the world’s largest ad firm by sales, which
also has heavy U.S. exposure, fell 4 percent as it reported
first-half like-for-like revenue up 2.5 percent, towards the
lower end of forecasts from a Reuters poll, and warned of
tougher comparatives ahead.

“Concern over global economic recovery continues to dominate
traders’ sentiment and as risk appetite ebbs away, equity prices
seem to be in danger of going into free fall,” said Ben
Critchley, a sales trader at IG Index.
(Graphics by Scott Barber; Editing by Sharon Lindores)

FTSE hits 1-month closing low on recovery doubts