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Sports Direct leads FTSE 100 towards third day of losses

by Chris Marshall on Dec 12, 2013 at 10:35

Sports Direct leads FTSE 100 towards third day of losses

The FTSE 100 fell for a third day, continuing a period of consolidation that clashes with the bullish end-of-year forecasts being issued by banks and asset managers.

Uncertainty about when the US Federal Reserve would start cutting back its stimulus scheme was yet again to blame. The Fed's FOMC committee meets next week, with a chance that it could start 'tapering' its $85 billion (£52 billion) monthly bond-buying scheme.

'News of a possible imminent US budget deal must surely increase the probability of a taper even if they are still below 50%, commented Deutsche Bank's Jim Reid. 'As such the deal creates a source of market volatility even if it should in theory be a welcome development.'

Weak data on the eurozone economy also hurt sentiment, with a report showing that industrial output in the currency bloc fell by 1.1% in October.

The FTSE 100 fell 0.6% to 6,465, worse than the 0.4% decline on Europe's Stoxx 50 index.

Sports goods chain Sports Direct (SPD.L) fell 8.2% to 707p, the biggest loser on the FTSE 100, after reporting a 12.3% rise in half-year earnings to £183.3 million.

Analysts at Liberum maintained their ‘buy’ rating. ‘Our view remains that Sports Direct has plenty of levers to pull across the P&L to drive long term growth, with medium term risks on the upside,’ they commented.

RBS (RBS.L) dropped nearly 2% to 320p after the bank was fined $100 million by US regulators for violating sanctions against countries including Iran and seperately announced that fanance director Nathan Bostock was leaving.

John Wood Group (WG.L), the energy services company, dropped 10% to 719p after issuing a profit warning.

The British pound crept up 0.1% to $1.6393 after the British Chambers of Commerce estimated that the UK economy will expand at its fastest rate in seven years in 2014.

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