By Francesco Canepa
London - UK blue chips edged lower early on Monday as signs of sluggish progress in crucial US budget talks fueled some profit-taking after recent, hefty gains.
Growth-dependent cyclical stocks lead the retreat after U.S. Senate Majority Leader, Harry Reid, said there had been “little progress” among lawmakers in negotiations to avoid a 'fiscal cliff' of spending cuts and tax hikes that could stall the world's largest economy.
At 0824 GMT, Britain's FTSE 100 was down 22.94 points, or 0.4 percent at 5,776.03 points, shedding all of Tuesday's gains and a fraction of last week's 213 points rally.
The FTSE has been trading in a range comprised between 5,600 and 5,900 since August as a boost from monetary stimulus from the world's largest central banks was offset by concerns about a recession in part of the euro zone and uncertainty over the U.S. fiscal cliff.
“We're seeing short positions coming on board with a view to closing at 5,600,” Manoj Ladwa, head of trading at TJ Markets said.
“(If a deal on the fiscal cliff is reached) you'll start seeing volumes returning back to the market and the index creeping up towards the high end of the range around 5,900.”
In a sign of the flight to safety on Wednesday, shares in defensive United Utilities topped the FTSE 100 leader board, up 2 percent after the multi-utility posted a rise in first-half revenues and said it was on track to meet regulatory outperformance targets. - Reuters