THE UK’S leading share index fell yesterday after weaker-than-expected US data hit growth-sensitive stocks, managing nevertheless to score its longest run of monthly gains.
The FTSE 100 ended 27.9 points, or 0.4 per cent, down at 6,427.52, showing a 0.3 per cent gain for April and taking its winning streak to 11 months versus 10 consecutive monthly gains in 1996-1997 and 1986-1987.
“Investors are being cautious ahead of interest-rate decisions from US Federal Reserve and the ECB,” Myrto Sokou, analyst at Sucden Financial Private Clients, said, referring to central bank meetings today and tomorrow respectively.
“In the meantime people are locking in gains, and it makes absolute sense to see some consolidation,” he said.
The lower rates and injectons of liquidity should help companies export more overseas and have also led investors to shift money out of bonds and into equities for better returns.
Mining stocks – down 17 per cent on the year against a FTSE 100 rise of nine per cent – accounted for nearly half the index’s fall, losing 2.4 per cent in line with metal prices.
Lending support were expectation-beating results, including Lloyds and BP. BP’s 2.1 per cent rise added 7.2 points to the index after profits topped forecasts by $1bn in the first quarter, helped by two new oilfields and a strong performance from its trading division.
Part-nationalised British bank Lloyds also posted higher first-quarter profits to send its shares up by 5.1 percent to the top of the FTSE 100’s leaderboard.
Online fashion retailer Asos, which has seen its shares more than double over the last year, closed at 2,988p, up 4.85 per cent, valuing the business at £2.46bn.
The FTSE 100 has risen by nearly 10 per cent since the start of 2013 but some traders expect the market to trade sideways or fall slightly in the next couple of months as some investors sell shares in order to book profits on the rally.
“I would still sell strong rallies on the FTSE,” said Hartmann Capital trader Basil Petrides.
The FTSE 100 last week scored its biggest five-day gain since the first week of the year, carrying it to within one per cent of five-year highs hit at the beginning of March.
Yesterday’s loss left the main index comfortably inside its recent 300-point range between 6,500 and 6,200, that has prevailed since the middle of January.
Sucden’s Sokou said that a rate cut could see the FTSE challenge resistance at the top end of that range.
Data show 80 per cent of blue chip companies reporting results have beaten or met expectations.