Pullback on UK's FTSE deepens as HSBC slips

Britain's benchmark equity index slid further on Friday, knocked by a fall in major bank HSBC's shares, after taking its steepest drop in a year in the previous session.

Pullback on UK's FTSE deepens as HSBC slips

World Bulletin/News Desk

Britain's benchmark equity index slid further on Friday, knocked by a fall in major bank HSBC's shares, after taking its steepest drop in a year in the previous session.

The blue-chip FTSE 100 was down by 0.6 percent, or 41.02 points, at 6,655.77 points in mid-session trade, following on from a 2.1 percent fall on Thursday.

Injections of liquidity and interest rate cuts by major central banks have hit returns on bonds and driven investors to seek better returns from equities, feeding a world stock market rally.

The FTSE hit near 13-year highs this week but that rally stalled on Thursday over concerns that the U.S. may soon scale back some of its stimulus measures due to increasing signs that the U.S. economy is finally recovering.

The UK market remains up by 13 percent since the start of 2013 and many investors expect any pull-back to be temporary, but some traders added they would wait for further falls before buying back into the market.

"I would not buy at these levels. I would want to see a real correction, at least down by another 10 percent or so from the highs," said EGR Broking managing director Kyri Kangellaris.

HSBC, Europe's biggest listed bank by market capitalisation, fell 1.7 percent to 729.33 pence to take the most points off the FTSE 100.

Traders cited concerns that HSBC's $1.9 billion settlement with U.S. authorities over money laundering charges may have stalled as the main reason for the stock's decline.

"I am looking for them to go a bit lower," said Hartmann Capital trader Basil Petrides, who sold HSBC stock earlier this month at 761 pence.

A spokesman for the bank said it was "focused on taking all necessary steps to fulfill its obligations under the agreements with the U.S. and UK governments."

Last Mod: 24 Mayıs 2013, 14:25
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