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FTSE sell off as investors rush to take profits
by Gavin Lumsden on Feb 04, 2013 at 16:10
FTSE edges off high after Vodafone downgrade
09.52: Vodafone (VOD.L), a longstanding member of Citywire Top Stocks and a key holding in many investment funds, fell 3.1p or 1.8% to 170p after Citi downgraded the telecoms group to ‘neutral’ from ‘buy’.
The shares have advanced 10% so this year, with talks of a settlement with India over a long-running tax dispute augmenting the general market rally.
The stock’s fall was the main factor in the FTSE 100 dipping 14 points, 0.2%, to 6,333 after the 70 point advance on Friday. Overall, though, the mood was confident boosted by positive non-manufacturing figures overnight from China.
These followed the release on Friday of encouraging US manufacturing figures and jobs data which, while themselves unimpressive, meant the Federal Reserve would likely continue its ‘ultra-loose’ monetary policies, which reassures markets.
However, the UK construction sector remains in the mire with the Markit/CIPS Construction Purchasing Managers Index stuck at 48.7 in January, way below the 50 level that separates contraction from growth and below econmists' forecasts of a rise to 49.1.
European markets softened with the Euronext 100 half a point off at 269.7.
On currency markets the euro fell 0.3% against the dollar weighed down by another increase in Spanish unemployment, which comes as prime minister Mariano Rajoy faces calls to resign over a corruption scandal.
The pound firmed 0.24% to $1.5727 against the dollar.
Gold dipped 0.1% to $1,664.94.
Meggitt (MGGT.L), whose US subsidiary Securaplane Technologies makes the charger for the batteries at the centre of the grounding of Boeing 787 Dreamliners, fell 8p of 1.9% to 433p after US officials said they were making progress in their investigation.
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