adminin the previous session, which cast doubt over the global economic recovery.
Retailers, who are fundamentally exposed to the health of the economy, were among the top fallers with Europe’s biggest home improvements retailer Kingfisher Plc 2,5 percent lower.
Despite reporting a 19 percent rise in retail profit, Kingfisher remained cautious on its outlook, which prompted Investec to forecast profit taking on the stock due to the lack of upgrades to estimates.
FTSE 250 peer Home Retail shed 2,3 percent, while online fashion retailer ASOS slipped 10,6 percent after its own full-year results, which analysts said failed to justify the shares’ bloated valuation (89 times forward PE).
London’s blue chip index extended Wednesday’s 1 percent slide, which came after a below-forecast US ADP private employment report and a weak ISM survey. They followed bleak PMI data in the UK and Europe. As risk sentiment suffered commodity stocks and banks fell. US stock index futures pointed to a slightly higher open on Wall Street yesterday after sharp declines in the previous session.
Investors, however, were wary of taking too bullish a position ahead of US weekly jobless claims, and more importantly non-farm payrolls data due out today.
“The data over the last few days has been shockingly bad. A lot of people are now wondering whether there is any sort of recovery going on, which has put the mockers on equities,” said David Morrison, market strategist at GFT Global. – Reuters.
But Morrison said should the non-farm payrolls disappoint on Friday the calls for QE3 in the U.S. will get louder, which would see investors rush back towards equities.
Phil Roberts, chief European technical strategist at Barclays Capital, sees enough bull support, supported by yields, to stop Britain’s FTSE 100 falling too far below 5,850, and keeping within its 250-point trading it’s been in since mid-April.
He said that at the very least the FTSE would have to close below its 200-day moving average of around 5,790 or more importantly the trend line of 5,717, before he started getting concerned.
London-based outsourcer Serco gained 2.8 percent as Credit Suisse upgraded its target price and estimates for the outsourcing group, following its recent acquisition of Indian private sector outsourcer Intelent.
“Emerging markets represent a considerable and growing proportion of the world economy and offer significant return potential,” said Morgan Harting, a senior portfolio manager at Alliance Bernstein, which has around $477 billion under management.
Peer Capita rose 0.8 percent.
Upbeat broker sentiment also gave Experian a lift, up 0.6 percent, as Nomura started coverage of the credit information firm with a “buy” rating highlighting a clear growth strategy.
Back on the downside, British chip designer ARM dipped 3 percent, in a weaker European market for tech stocks, despite Microsoft giving a glimpse of Windows 8, which will run on ARM architecture. – Reuters
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