By Sudip Kar-Gupta
LONDON (Reuters) – Britain’s main equity index fell for the seventh time in eight sessions on Thursday, as a drop in the shares of drinks group Diageo and concerns about problems in emerging markets weighed on the market.
The blue-chip FTSE 100 index was down by 0.3 percent, or 21.63 points, at 6,522.65 points in early session trading, pushing the index close to its lowest level since mid-December.
A 4.2 percent fall at Diageo took the most points off the FTSE, after the world’s biggest distilled spirits company reported a slowdown in net sales growth due to weakness in China, Thailand and Nigeria.
Social unrest and currency problems in emerging markets such as Thailand, Turkey and Argentina have knocked back global equities this week, along with lingering concerns about an economic slowdown in China, the world’s second-biggest economy and biggest consumer of metals.
A Markit/HSBC survey on Thursday pointed to fresh signs of a weak start for China in 2014, which further weighed on the FTSE and its mining stocks, with the FTSE 350 Mining Index falling 0.3 percent.
“Poor data from China is always going to have a knock-on effect on the market,” said IPR Capital director Steven Mayne.
Although many investors expect the FTSE to eventually hit a record 7,000 point level in the first quarter, helped by signs of a gradual rebound in the British and world economy, Mayne and others said now was not the time to buy into the market.
The FTSE 100 rose 14.4 percent in 2013 to post its best annual gain since 2009, but has struggled to break above its 2013 peaks at the start of 2014.
Hantec Markets analyst Richard Perry said the FTSE was vulnerable to further drops that could push it down to the 6,500 or 6,422 point levels – with 6,422 points marking a low point reached in December.
Perry said it would be better to wait to see if the FTSE could rebound from those low levels before buying back in.
“The markets are coming under pressure on those long bull runs that they’ve had,” he said.
(Editing by Toby Chopra)
- Market Movers
- FTSE 100 index