Britain's FTSE succumbs to modest profit-taking

[May 01, 2009]  LONDON (AP) -- The FTSE 100 index of leading British shares declined modestly Friday on light profit-taking as many of the world's biggest markets were closed for the May Day public holiday, while Japan's stock market hit a four-month high.

By midmorning London time, the FTSE was down 9.33 points, or 0.2 percent, at 4,234.38. Germany's DAX and the CAC-40 in France were closed.

"Any profit taking at the top is arguably somewhat overdue -- equities have rallied hard through April so there's certainly justification to be locking in some of the gains, " said Matt Buckland, a dealer at CMC Markets.

Stocks around the world have risen this week amid mounting hopes the global downturn was stabilizing despite the spread of swine flu around the world. The gains kicked off when the U.S. Federal Reserve said Wednesday that the recession had eased slightly since its last meeting in mid-March -- stock markets usually rally around six to nine months before real evidence of an economic recovery.

Nevertheless, investors remained wary of calling an end to the bear market, in the knowledge that the rally could prove to be another false dawn. At the end of October last year after the most acute phase of selling in the markets, stocks around the world recovered strongly before another rout emerged in March.

"The bullish sentiment has been unrelenting this week, but we are wary of the possibility for further strides over the coming days," said David Keeble, an analyst at Calyon Credit Agricole.

"The swine flu outbreak has been off the equity and bond markets' radar for a few days, but clearly the situation is intensifying rather than easing," he added.

In Mexico, the government has decided to shutdown big chunks of its economy to limit the spread of the virus as the number of suspected cases continued to rise around the world. The World Health Organization, which on Thursday said a pandemic was imminent, increased its tally of confirmed swine flu cases around the world to 257 from 148.

Earlier, Tokyo's benchmark Nikkei 225 stock average brushed aside any swine flu concerns as it jumped 149.11 points, or 1.7 percent, to 8,977.37, its highest close in nearly four months. A weaker yen versus the dollar supported sentiment, as did relief over Wall Street's muted reaction overnight to Chrysler's bankruptcy.

Meanwhile, Australia's S&P/ASX 200 slipped 0.3 percent to 3,769.6, and New Zealand's NZX-50 was off 0.8 percent at 2,719.92.

Financial markets throughout much of Asia were closed for May Day and other holidays. Markets were closed in mainland China, Hong Kong, Taiwan, Thailand, Malaysia, Singapore, South Korea, the Philippines and India.

Japanese markets will be closed next Monday through Wednesday.

In New York Thursday, the Dow Jones industrial average ended about 17 points lower after President Barack Obama confirmed that Chrysler LLC will be going through a bankruptcy reorganization. Nevertheless, the Dow still ended April 7.4 percent higher than where it started.

Further modest buying was expected at the open in the U.S. Dow futures rose 21 points, or 0.3 percent, to 8,147, while the broader Standard & Poor's 500 futures were up 2.6 points, or 0.3 percent, to 872.6.

Oil prices were lower, with benchmark crude for June delivery falling 47 cents to $50.65 a barrel in electronic trading on the New York Mercantile Exchange.

The dollar rose to 99.41 yen from 98.85 yen late Thursday in New York. The euro strengthened to $1.3255 from $1.3243.

[Associated Press; By PAN PYLAS]

Associated Press writer Tomoko A. Hosaka in Tokyo contributed to this report.

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