Miners, tech drag FTSE lower, banks firm

By Simon Falush

LONDON (BestGrowthStock) – Britain’s top share index retreated in early trade on Tuesday as commodity stocks tracked energy and metal prices lower, while technology related stocks fell after Apple (AAPL.O: ) results disappointed.

By 0822 GMT the FTSE 100 (.FTSE: ) was 9.28 points or 0.2 percent lower at 5,733.24 after it gained 0.7 percent on Monday, helped by energy firms and banks which were lifted by stronger than expected results from Citigroup (C.N: ).

Energy stocks were the biggest drag on the index, weighed by a slight drop in the price of crude oil. BG Group (BG.L: ), BP (BP.L: ), Royal Dutch Shell (RDSa.L: ) fell 0.6-0.8 percent.

Miners were also pressured as some metal prices retreated slightly. Xstrata (XTA.L: ) fell 1 percent after it posted mixed third quarter production data while BHP (BLT.L: ) fell 0.7 percent.

Technology stocks were the sharpest fallers, pressured as Apple disappointed investors after reporting weaker-than- expected gross margins and iPad shipments. ARM Holdings (ARM.L: ), which designs Apple chips, fell 2 percent.

“We’ve seen massive profit taking in Apple, and with so little news around, it takes so little to move markets,” said David Buik, senior partner at BGC Partners.

He said the outlook for UK equities looks to be set fair, however, despite tough times ahead for the domestic economy.

“(The FTSE 100) pays decent dividends, 70 percent of earnings come from overseas and we’ve been cheered so far by a decent set of earnings, and I don’t see any other asset class as looking attractive.”

Software designer Autonomy (AUTN.L: ) fell 0.1 percent after it said organic growth slowed in the third quarter, pressured also by a price target cut from Panmure Gordon.

Financials added to gains the previous session after Citigroup results beat forecasts, boosting optimism that the sector is seeing a strong recovery.

Majority state-owned Royal Bank of Scotland (RBS.L: ) was the top blue-chip gainer, up 1.8 percent while credit-checking company Experian (EXPN.L: ) added 1.4 percent.


Britain’s biggest hotel operator Whitbread (WTB.L: ) gained 0.8 percent after it reported a first-half pretax profit at the top end of expectations, boosted by strong growth and new hotel and branch openings at Costa Coffee and Premier Inn.

Defensive stocks were generally under pressure, as investors rotated into more cyclical areas.

Consumer goods producer Unilever (ULVR.L: ) fell 1.2 percent while drugmakers Shire (SHP.L: ) and GlaxoSmithKline (GSK.L: ) eased 0.9 percent and 0.8 percent respectively.

Technical analysts said there seems to be little impetus to push the market much beyond current levels in the near future.

“Despite the continuation of the uptrend there is some early indication that the uptrend could transition into a more sideways market cycle,” Raghee Horner, chief market analyst at Autochartist said. “This will confirm if prices remain trading below 5800.”

(Editing by Mike Nesbit)

Miners, tech drag FTSE lower, banks firm