FTSE 100 falls as investors lick wounds after turbulent week
09/02/2018 10:09
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* FTSE 100 down 0.4 pct
* Financials weigh but cyclicals support index
* Hogg Robinson surges 49 pct on AmEx takeover offer
* Trinity Mirror jumps after deal to buy Express titles
* China, EM funds fall after sell-off strikes Asian stocks
By Helen Reid
LONDON, Feb 9 (Reuters) - British shares fell modestly on
Friday in calmer trade at the end of a turbulent week which saw
the FTSE 100 sink to a 13-month low as a sell-off struck global
markets.
The FTSE 100 .FTSE was down 0.4 percent by 0950 GMT,
having earlier this week suffered its worst losses since the
Brexit vote. The index was down 8 percent from its record high
hit on Jan 12.
Investors mulled the biggest question facing the market: did
this week's correction mark the start of a bear market?
"If we look at other indicators it doesn't look the case,"
said Rory McPherson, head of investment strategy at Psigma
Investment Management in London.
"Interbank lending rates are still pretty low, credit
spreads have moved up slightly from record lows but haven't
blown out, and earnings season is coming along pretty well," he
added, saying the sell-off was caused by equity markets being
overbought and slightly over-valued.
Financials were the biggest weight on the index on Friday,
reflecting a drop in banking stocks across European markets.
Investors said however that the Bank of England saying on
Thursday it would raise rates sooner and by more than it thought
three months ago would probably lend support to domestic bank
stocks in the medium-term. urn:newsml:reuters.com:*:nL8N1PY537
Chemicals firm Johnson Matthey JMAT.L was the biggest
faller, down 4.4 percent after rival Umicore UMI.BR raised 892
million euros to fund capacity growth. urn:newsml:reuters.com:*:nL8N1PZ22O
Merger and acquisition news shook up the small-cap market.
Trinity Mirror TNI.L shares jumped 6.6 percent after the
publisher of the Daily Mirror agreed to buy rival titles the
Daily Express and Daily Star in a takeover bringing together
tabloids from opposite ends of the political
spectrum. urn:newsml:reuters.com:*:nL8N1PZ1D0
Shares in British business travel company Hogg Robinson
HRG.L shot up 49 percent, leading the small-cap index by far
after saying it had received a takeover offer from American
Express's AXP.N global business travel unit, and had agreed to
sell its payments technology business to Visa V.N .
urn:newsml:reuters.com:*:nL4N1PZ339
Materials and industrials stocks were the biggest boosts to
the FTSE 100. Miners Rio Tinto RIO.L and Anglo American
AAL.L led sector gains, up 1.5 percent each.
"An encouraging sign is that domestic and cyclical stocks
have held up really well in this sell-off," said McPherson,
adding that more expensive parts of the market, like technology
and healthcare, had been the worst hit.
Valuations across European stocks and UK stocks were sent
down by this week's falls. Volume has been heavy during the
week, with some 1.4 billion UK shares trading hands on Tuesday,
the most in nearly five months.
"The UK market trades on around 14 times next year's
earnings, which is good value," said McPherson.
Also weighing on the market were listed funds exposed to
China and emerging markets, suffering after a dramatic sell-off
in Asian shares overnight sent Chinese equities to multi-month
lows. urn:newsml:reuters.com:*:nL4N1PZ2E0
Shares in JPMorgan Chinese Investment Trust JMC.L fell 4.4
percent, one of the worst performers on the small-cap index.
Fidelity's China Special Situations Fund FCSS.L fell 2.4
percent on the FTSE 250, with Schroder's Asia Pacific fund
SDP.L down 2.3 percent. Emerging markets fund manager Ashmore
ASHM.L also fell 2.8 percent.
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UK stocks still 'good value' http://reut.rs/2BOJONw
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(Reporting by Helen Reid; Editing by Peter Graff)
((Helen.Reid@thomsonreuters.com; +44 20 7542 0402;))
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Keywords: BRITAIN STOCKS/