FTSE Extends Weakness On Syria Worries

by
Reuters
Britain's top share index fell on Wednesday, extending the previous session's losses, as leading U.S. lawmakers' support for military action against Syria took its toll on investor sentiment.

* FTSE 100 down 0.3 percent

* Syria concerns keep investors on edge

* Airlines among top fallers after Ryanair profit warning

* Ex-divs take 4.2 points off index

Britain's top share index fell on Wednesday, extending the previous session's losses, as leading U.S. lawmakers' support for military action against Syria took its toll on investor sentiment.

Airlines suffered steep falls, with budget airline easyJet off 7 percent, while British Airways parent IAG dropped 4 percent, as traders cited a read-across from Ryanair's weak update.

Shares in the Irish group, which said it could miss its full-year profit forecast, sank 14 percent.

A fall in the value of stocks trading without the attraction of their latest dividend, including Resolution, TUI Travel, and BHP Billiton, weighed on the index to the tune of 4.23 points on Wednesday.

The FTSE 100 was down 17.79 points, or 0.3 percent, at 6,450.62 points by 0735 GMT, having dropped 0.6 percent on Tuesday against a backdrop of investor concern over Syria.

"Upside is going to be limited for now, at least till the Obama attacking Syria situation is resolved," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million in assets.

This uncertainty means he will look to sell into any strength.

Late on Tuesday, leaders of the U.S. Senate Foreign Relations Committee reached an agreement on a draft authorisation for the use of force in Syria, paving the way for a vote by the committee on Wednesday.

However, the draft is much narrower than the request made by President Barack Obama and includes a provision barring the use of U.S. troops on the ground.

GFT Markets technical analyst Fawad Razaqzada was cautious on the UK benchmark given the situation in Syria and ahead of Friday's U.S. jobs report which he said will likely have a significant bearing on the index's direction.

The data will put the focus squarely back onto the debate over when the U.S. Federal Reserve will scale back its huge bond-buying programme which has fuelled a rally in world equities over the past year.

In the meantime, Razaqzada would not rule out a drop to around 6,332, the 200-day moving average.