FTSE poised for monthly loss as hit from insurers leads to technical fall

BRITAIN’S blue-chip index ended lower yesterday as disappointing US economic data pushed investors to cash in their quarterly gains, setting the index on course for its first monthly loss of the year.

The FTSE 100 closed 60.56 points, or one per cent, lower at 5,808.99 points, extending losses in the afternoon after breaking below its 50-day moving average at 5,850.

Weighing on the FTSE yesterday were cyclical stocks as weaker-than-expected durable goods orders data from the US, the world’s largest economy and a key source of profit for UK blue-chips, provided investors with a good reason to cash in on a strong first quarter.

Metals and mining stocks fell 4.3 per cent and 2.9 per cent respectively, tracking copper prices into the red as the weak US data dented the demand outlook.

Steelmaker Evraz dropped 5.5 per cent after it said the outlook for the global steel industry would remain tough this year as its 2011 net profit missed market expectations. But the FTSE was still up 4.3 per cent year-to-date at close yesterday, supported by a 19 per cent rally in the banking sector.

RSA Insurance was the top FTSE faller, losing 7.5 per cent as the insurance sector was hit by news of the second biggest ever annual loss at the Lloyd’s of London insurance market following a record run of catastrophe claims. Also weighing on the sector were ex-dividend factors, with both RSA Insurance and Prudential trading without their payout entitlements. Icap, the world’s largest interdealer broker, fell 3.5 per cent in volume, as investors cashed in on a 30 per cent rally since January after the firm’s outlook statement was less upbeat than the market had hoped for.