Aberdeen leads FTSE lower after director sell-off

BRITAIN’S leading share index fell yesterday, led lower by financial stocks after comments from US Federal Reserve officials intensified expectations the Fed’s monetary stimulus may be reduced.

Fund managers were among the biggest fallers partly because asset management firms are sometimes seen as long-term proxies for stock markets. Aberdeen Asset Management, the top non ex-dividend faller on the FTSE 100, plunged 5.7 per cent after being cut from the UBS “key call” list. Aberdeen’s chief investment officer Anne Richards also offloaded 1.4m shares in the company. “Stellar year to date share price performance may have informed both decisions, and the stock is taking a well-earned breather,” added Matt Basi, head of UK Sales Trading at CMC Markets.

Schroders fell 4.3 per cent. Mid-cap Man Group slumped 16.7 per cent after its flagship fund suffered one of its biggest weekly losses.

Fears over the Fed tapering its stimulus also hit sentiment. Dallas Fed President Richard Fisher said on Tuesday the bank might make changes to its bond-buying programme and Kansas City Fed President Esther George said slowing its pace would help wean markets from their dependence on easy money.

The FTSE 100 closed down 139.27 points, or 2.1 per cent, at 6,419.31 points, with financials, a broad-based sector including fund managers, insurers and banks, taking 31 points off the index.

“The Fed officials with their comments have been moving the market significantly, and if there is a downtrend, as there has been, we have to play that downtrend,” Mike van Dulken, head of Research at Accendo Markets, said.

The FTSE 100 has fallen 5.2 per cent in the last two weeks since Federal Reserve officials began pondering their exit strategy from a monetary stimulus programme which has helped to spur the index towards 13-year highs. Stronger than expected UK Services PMI data was not enough to lift the FTSE 100, however, and mixed US data provided little clarity over the state of the US economy.

Tesco, down 3.9 per cent, contributed to the weaker tone of the market after reporting a 1 per cent fall in underlying sales in the UK in the first quarter, toward the lower end of analysts’ expectations and raising doubts about a costly recovery plan.