UK stocks : FTSE 100 falls 0.3 percent
have been a massive outperformer all year, they're at five-plus-year highs, and they've been a great hiding-place, because you've had some growth there, said Nick Xanders, head of European equity strategy at brokerage BTIG.
But these things are now trading on very high multiples. So you need these things to carry on growing, and that could be an issue. Some of the beverage names have been making acquisitions to keep growing, but there's only so much growth you can buy.
Some defensive stocks did benefit from the cyclical sell-off however, with shares in United Utilities among the FTSE 100 leaders. They rose 2 percent after the multi-utility posted a rise in first-half revenues and said it was on track to meet regulatory outperformance targets.
Volume was thin, at just 22 percent of the average 90-day volume, and the profit taking saw the FTSE remain in a range of between 5,600 and 5,900 that has persisted since August.
A resolution to the fiscal cliff, which will come into effect in January if no deal is done, is seen as key to boosting both equity prices and volumes.
We're seeing short positions coming on board with a view to closing at 5,600, TJ Markets head of trading Manoj Ladwa said.
(If a deal on the fiscal cliff is reached) you'll start seeing volumes returning back to the market and the index creeping up towards the high end of the range around 5,900.
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