FTSE falls as banks and miners hit by concerns over earnings outlook
BRITISH blue chip shares dipped yesterday with growth-linked banks and miners hit by concerns about earnings and the global outlook, although analysts said the market’s uptrend would resume soon.
UK banks fell 1.2 per cent, while mining stocks were down 0.4 per cent after the World Bank cut its growth forecasts for China and as investors prepared for third-quarter earnings, which kick off in the United States today with results from aluminium company Alcoa.
According to Thomson Reuters data, earnings for the US S&P 500 companies are forecast to have fallen 2.4 per cent from a year earlier, the first drop in three years. The earnings season in Europe will pick up in the second half of October.
Cookson Group, which makes products for the global steel industry, and recruiter Michael Page yesterday became the latest UK firms to issue profit warnings. Cookson shares plunged 12.4 per cent while Michael Page shed 0.6 per cent.
Traders and analysts said the index had potential to bounce back again soon as the overall trend remained positive. Expected developments such as Spain seeking a bailout and some clarity on the US “fiscal cliff” of spending cuts and tax rises could lift investors’ appetite for risk, they said.
The market saw choppy trade, with the FTSE 100 paring losses late in the session to end 29.28 points, or 0.5 per cent, lower at 5,841.74, after falling to a low of 5,818.76.
The index, which has traded in a broad range of 5,630-5,930 in the past two months, is up nearly 5 per cent this year and has gained 11 per cent since a low in June.