FTSE 100 extends losing streak as ARM slumps
Britain's top equity index fell for the 10th time in 11 sessions on Tuesday, as a drop in the share price of chip designer ARM kept the market near a two-month low. The blue-chip FTSE 100 index closed down by 0.3 percent, or 16.39 points, at 6,449.27 points - its lowest close since ending at 6,439.96 points on December 13. ARM fell 5.9 percent in heavy volume to make it the worst-performing FTSE stock in percentage terms, after it posted a smaller-than-expected rise in royalty revenues.
Copyright Reuters, 2014
Trading volumes in ARM came in six times above the average 90-day volume in the stock, while volumes on the FTSE 100 were 1.5 times above the index's average 90-day volume. The FTSE rose 14.4 percent in 2013 to post its best annual gain since 2009, but it has fallen back by around 4.4 percent since the start of 2014. Global equities have lost ground at the start of this year on concerns over slowing growth in China and the United States, while a slump in emerging markets has also hit stock markets.
"It is definitely a risk-off attitude dominating the markets right now, sparked by the macro data showing that the two biggest economies in the world are losing momentum," said Varengold Bank trader Anita Paluch. Signs of weak corporate results from major companies, such as ARM and UK bank Lloyds on Monday, have also reinforced some investors' concerns that corporate results will not be strong enough to drive the stock market higher during the first quarter of this year.
H20 Markets chief strategist Mike Jarman expected another 3 percent pull-back on the market in the near term. Hantec Markets analyst Richard Perry also noted the FTSE remained below its 200-day simple moving average level of around 6,560 points - seen by technical traders as a sign that the market remains under pressure. "There's a good few negative signals out there," said Perry.