FTSE set for biggest drop of 2014

Britain’s main equity index was set for its biggest one-day fall this year on Thursday, weighed down by disappointing U.S. economic data and weak updates from Easyjet and Pearson.

The FTSE 100 extended losses in the afternoon as data showed U.S. manufacturing growth slowed in January for the first time in three months, further denting sentiment about the world’s largest economy after discouraging earnings reports from bellwether companies such as McDonald’s.

The FTSE 100 was down 60.11 points, or 0.9 per cent to 6,766.22 points at 1555 GMT, on course for its biggest daily loss since December 12 and slipping further away from an eight-months high of 6,867 points hit on Tuesday.

The FTSE is still up roughly 5 per cent since mid-December, boosted by flows of money into Europe in light of better-than-expected data in Britain and the euro zone, which are responsible for half of the sales generated by UK blue chips.

The FTSE fell in eight of the last 24 trading days and each dip was followed by a stronger bounce in the index over the following few days. Some traders bet this time will be no different.

“All the little moves (down) ended up being bought so it’s likely that it will be the same case here, albeit this one is a bit more dramatic,” Giles Watts, head of equities at City Index, said.

Watts still expected the FTSE to head towards an all time high of 6,950 set in late 1999.

Shares in Pearson plunged 8.2 per cent, their biggest fall in 12 years, after the publisher reported big restructuring charges alongside weak demand in its education businesses in North America and Britain.

Easyjet was also among the top fallers, off 3.9 per cent after the budget airline guided that first half seasonal losses would be higher this year than last year due to the timing of Easter, which falls in its fiscal second half.

Basic materials knocked a further 3.4 points off the FTSE as data showed activity in China’s factory sector contracted in January for the first time in six months, according to the Markit/HSBC PMI, pointing to a weak start in 2014.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.