Business news feedFTSE shuffles higher but BP blues keep gains slim


Posted on Thursday, 16 June 2011 15:45

FTSE shuffles higher but BP blues keep gains slim

June 16, 2011, 2:57 pm

By Simon FalushLONDON (Reuters) - Gains from defensive tobacco and pharmaceuticals stocks helped push Britain's top share index slightly higher on Thursday, offsetting weakness from BP, after the launch of a U.S. lawsuit over the gulf oil spill.By 1153 GMT the FTSE 100 was 0.2 percent higher at 5,891.15 after it ended down 9.03 points, or 0.2 percent on Wednesday, snapping a four-session winning streak. It finished at its highest close for 30 months on Tuesday.Futures and options expiries made for skittish trade. Quadruple-witching expiries of index and individual company futures and options went through at 1000 GMT in London on Thursday.BP took most points off the index, falling 1.8 percent on investor anxiety that U.S. government legal action might make the cost of the oil spill much greater than earlier thought.Trade overall was light, with investors reluctant to take big new positions as activity winds down in the run-up to the festive period."We've had a decent run in equities as sentiment has recovered and technical indicators have rebounded so it's natural that the market will be taking a breather... and activity is dying down as we move to the end of the year," said Ronan Carr, European equity strategist.The FTSE 100 is up 6.1 percent so far this quarter after a 12.8 percent gain for the third quarter.DEFENSIVES BOOSTInvestors rotated into stocks perceived as better able to weather a harsh economic climate, with drugmaker AstraZeneca up 0.5 percent, brewer SABMiller up 1.4 percent and British American Tobbacco gaining 0.8 percent.Business support services companies also lent support to the index after Serco said its guidance for 2010 remained on track prompting Investec to repeat its "buy" rating on the stock.It gained 2.9 percent while peer Capita gained 0.7 percent as sentiment on the sector was bolstered.British retail sales rose at a slightly weaker than expected pace in November but the previous month's growth was revised up, leaving the broad picture unchanged from analysts' forecasts.Across the Atlantic, the latest U.S. weekly jobless claims numbers will be released at 1330 GMT together with November housing starts, while December's Philly Fed index will be released at 1500 GMT.European leaders sought to paper over deep divisions on how best to resolve the debt crisis ahead of a summit on Thursday. Spain and Portugal came under renewed pressure to get their finances in order.Among second tier stocks Sports Direct was the strongest gainer, up 6.2 percent after Britain's biggest sporting goods retailer said the recent cold snap had been a "net positive" as winter products were in demand.Technical factors were seen pressuring the UK blue-chip index."Unless the market can find its footing back above 5,900 the technical indications are for a corrective move from here, with key support levels at 5,850 and 5,790 likely to be tested on any further profit-taking action," said Jonah S. Ford, analyst at Autochartist."The breakout of the Rising Wedge chart pattern, if successful, portends a downside price target ranging from 5,841 to 5,820 in the near term."

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