* FTSE down 2.2, investors flee risky equities
* Uranium explorers retreat on Japan's nuclear concerns
* Miners seen benefitting in aftermath
LONDON, March 15 (Reuters) - Around 32 billion pounds ($52
billion) was knocked off the value of London's blue-chip index
on Tuesday, as the cost of Japan's devastating earthquake and
tsunami saw investors flee riskier equity and commodity assets.
By 1147 GMT, the FTSE 100 <> index was down 125.5
points, or 2.2 percent, at 5,649.74 having closed 0.9 percent
lower on Monday. The index is down almost 6 percent in March.
"The FTSE is now trading 8 percent off its February highs
and with the near term momentum gaining towards the downside,"
Joshua Raymond, Market Strategist at City Index, said.
"Traders could be waiting for the UK index to hit the 5,500
level before being enticed back into the market."
The previous session's relatively sedate reaction to the
disaster in Japan was replaced by panic after Japan's Nikkei
<> overnight dropped 10.6 percent, as the cost of the
devastation and concern over the ongoing nuclear crisis in the
country mounted. []
The FTSE volatility index <.VFTSE>, which measures investor
appetite for risk, was up over 15 percent, although volumes on
the FTSE 100 were lighter than its European peers.
London's blue chips traded at just 66 percent it average
90-day volume compared to 140 percent on Germany's Dax <.GDAX>,
with many putting this down to the start of the horse racing
festival at Cheltenham.
Miners <.FTNMX1770> and Integrated oils <.FTNMX0530> were
the top fallers, while traders said banks <.FTNMX8350> were
trimming debt holdings to cover losses from a sharp slide in
equities.
London-listed uranium explorers such as Berkeley Resources
<BKY.L> and Kalahari Minerals <KAH.L> fell up to 25 percent on
concerns over the future of the global nuclear power build
programme amid fears of a major radiation leak from the nuclear
complex in Fukushima following Japan's massive earthquake.
MINER HOPES
Traders, however, said longer-term the mining sector should
see upside given their lacklustre start to the year and the need
for Japan to rebuild.
"Through the short-term volatility in the miners we expect
them to move onto the upside (with today's sell off they are all
down between 5-7 percent on the year)," Atif Latif, director of
trading at Guardian Stockbrokers, said.
"Once the full impact (of the earthquake) becomes known we
expect there to be strong demand for base metals and steel," he
said, adding he also expects a flight to quality bid into
utilities, historically a safe haven sector.
Among individual fallers impacted by the disaster in Japan
was Luxury goods firm Burberry <BRBY.L>, down 4.3 percent, as
investors sold stock on concerns over Japanese demand for its
goods. Nomura analysts said the firm's licensing agreements in
Japan in total generated around 17 percent of Group
EBIT.[]
ARM Holdings <ARM.L> lost 3.2 percent as the chip designer
suffered from disruption to production as a result of the
massive quake in Japan.
UK retailers were the only stocks on London's blue chip
index with upside momentum. Next <NXT.L> rose 1.8 percent
helped, bullish broker comment, lower cotton prices and results
from mid cap department stores group Debenhams <DEB.L>, ahead
4.1 percent.
U.S. stock index futures pointed to sharp drops on Wall
Street on Tuesday, with investors focused on the crisis in
Japan, but with one eye on U.S. housing market data and, more
importantly, the FOMC rate decision due at 1815 GMT, after the
London market close.
(Editing by Andrew Callus)
