Mining stocks lead FTSE index lower
LONDON (Reuters) - A drop in major mining stocks pushed Britain's benchmark share index lower on Monday, while persistent concerns about an expected reduction in U.S. monetary stimulus also weighed on the market.
The blue-chip FTSE 100 index closed down 0.5 percent, or 34.26 points, at 6,465.73 points, continuing a pull-back that saw it dip 1.3 percent last week.
The fall in heavyweight mining stocks took the most points off the index.
The FTSE 350 Mining Index shed 2 percent as the price of copper fell after three weeks of gains, while miner Glencore Xstrata dropped 2 percent on expectations of a write-down on its assets.
The FTSE 100 raced to a 13-year high of 6,875.62 points in late May but has since slipped back, tracking a fall in global equity markets due to expectations that the U.S. Federal Reserve may start to scale back its stimulus measures next month.
The Fed's monthly bond purchases, which had pushed down bond yields and led investors to seek better returns in equities, have driven much of the global equity rally this year.
However, bond yields have risen over the last month due to growing expectations that the Fed may start to slow the pace of those bond purchases next month.
Securequity sales trader Jawaid Afsar said the FTSE was likely to fall between now and the next Federal Reserve meeting on September 17-18.
"There is nothing compelling to buy the market here," he said.
Afsar said he would only buy back into the FTSE 100 if it fell to the level of its 200-day simple moving average, which stands at around 6,294 points and is often seen by technical traders as a level at which buyers will step into the market.
The FTSE 100 is still up around 10 percent since the start of 2013. EGR Broking managing director Kyri Kangellaris also said now was a good time to take a profit on that run-up.
"If you've got any profits on the table, take them off," he said.
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