Anglo leads FTSE lower after strikeComment on this story
Britain's top share index slipped below a key support level on Wednesday, with miner Anglo American leading fallers after it was hit by new strikes.
Anglo American's shares shed 4.7 percent, having traded a third of their full-day volume average at 11:10 SA time, after
workers at one of its South African mines refused to go underground in protest at company plans to close mines.
The group's Kumba Iron Ore unit also warned on profits, citing falling prices and illegal strikes.
The share was the biggest faller on the FTSE 100, which was down 40 points, or 0.7 percent at 6,082.07. Also weighing on the index was Imperial Tobacco, which traded without its dividend entitlement.
The FTSE, which hit a 4-1/2 year high of 6,133 on Monday, was also trading below its 2011 high of around 6,100, suggesting buying momentum was fading.
“There wasn't a proper breakout and the fact that the index is around or below that level does suggest to me that it could struggle to make much headway in the near term,” Bill McNamara, a technical analyst at Charles Stanley, said.
“...A break below (last week's low at) 6,053 would suggest that a deeper corrective phase is under way.”
The next support for the FTSE was 6,008 points, the 23.6 percent retracement on the upward move between November and Monday's intra-day high of 6,133.
Traders said investors were reluctant to add to their holdings of shares, given the near 10 percent rally since mid-November and with more indications about the health of the global economy yet to emerge from the incipient US earnings season.
Major banks Goldman Sachs and JPMorgan Chase & Co, and online retailer eBay were due to report on Wednesday.
“The market is going to wait to see what happens when the US reporting season kicks off properly,” Yusuf Heusen, a sales trader at IG, said. “It's a case of wait and see at the moment.”
He said estimate-beating results could see the FTSE make new highs, boosted by the steady flows of new money coming into stocks in recent weeks.
Weekly inflows into equity funds hit a five-year high during the first full week of January, according to EPFR Global data, as bond-buying programmes by major central banks drove down bond yields and pushed investors into riskier asset classes. - Reuters