FTSE plummets on commodities

Britain's top share index fell sharply on Tuesday, led by commodity stocks which suffered partly from concerns over the nuclear crisis in Japan and the impact of the earthquake on its economy and also global growth. This dented mining stocks and technology firms such as ARM Holdings.
Miners dropped sharply, weighed down too by Alcoa's fall in the United States after the aluminium maker missed revenue estimates overnight. Rio Tinto shed 2.8 percent ahead of first-quarter results due out on Wednesday. "For us as portfolio managers this is just the opening salvo. We're waiting for the trend to emerge," Oliver Wallin, investment director at Octopus Investments, which has 1.2 billion pounds of funds under management. "At the moment our portfolios are weighted towards equities over other asset classes because other asset classes aren't looking particularly attractive."
The FTSE 100 closed down 88.97 points or 1.5 percent at 5,964.47, albeit in thin volumes. A technical analyst at Charles Stanley said many traders would be looking for an excuse to take profits after the FTSE put on 8 percent since March's lows.
He said a support level at 5,908, the current April low, would be worth keeping an eye on, "a breach of which would strongly suggest that the rally has topped out". The FTSE 100 volatility index rose 14.2 percent, hitting a one-week high. Goldman Sachs's call to lock in commodity trading profits weighed on crude oil prices, which put pressure on integrated oils. Cruise operator Carnival and International Consolidated Airlines Group rose 4.7 and 4.5 percent respectively, as Brent crude retreated from a 32-month high of $127.02 a barrel hit on Monday. High oil costs drove US import prices higher in March to post their largest increase in more than 1-1/2 years. With investors' confidence undermined, traders noted a flow into defensive stocks such as tobaccos, pharmaceuticals, and utilities.
Drugmakers AstraZeneca and GlaxoSmithKline were near the top of the FTSE 100 leader board, up 0.5 and 0.7 percent respectively. A note from Charles Stanley described the broader technical picture for GlaxoSmithKline - which hit its highest closing level on Monday since January after rallying strongly from a March low of 1,127.50 pence - as "encouraging".
"The price action of the last few months suggests that the double-bottom has formed in the region of 1,128 pence, while the magnitude of this pattern is indicating that there is still room for further upside in the near term," the broker said.