December 13 2013 at 12:26pm By Reuters
London - Britain's blue-chip share index edged down to a two-month low on Friday, with insurer RSA slumping after its chief executive resigned following a fresh profit warning.
The FTSE 100 index slipped 0.1 percent, or 4.20 points, to 6,441.05 points in early session trading - its lowest level since around mid-October and putting the index on track for its longest run of weekly losses since 2008.
RSA was the worst-performing blue chip, plunging 17.3 percent in heavy volume to its lowest level since around mid-2005, after chief executive Simon Lee resigned following a profit warning.
“This is clearly a very disappointing announcement for the company leading to uncertainty about ongoing profitability, capital levels, dividends and strategy,” said Oriel Securities analyst Marcus Barnard.
The FTSE 100 is up by around 9 percent since the start of 2013 but has lost ground this week due to lingering uncertainty over when the U.S. Federal Reserve may scale back its economic stimulus measures.
The Fed meets next week, and while the majority of investors still expect it will not begin to taper its economic stimulus programme until March next year, some believe it could start scaling back stimulus this month.
This uncertainty has led some investors to trim back equity holdings this month in order to book profits on the year's gains.
The FTSE has also been held back by a fall in mining stocks, which have underperformed due to lingering concerns about a possible economic slowdown in China.
“The miners haven't performed, and for the FTSE, that's a big deal,” said Toby Campbell-Gray, head of trading at Tavira Securities.
Campbell-Gray does not expect the FTSE to make much headway for the rest of 2013, but sees it rising again in 2014 as the UK's economic recovery continues.