Britain's FTSE starts Feb with biggest daily gain in a month

Fri Feb 1, 2013 11:53am EST

* FTSE 100 index closes 1.1 percent higher
    * Strong non-farm revisions help to extend gains
    * BT top riser after broadband fuels profits
    * Technical picture rosy for continued gains

    By Alistair Smout
    LONDON, Feb 1 (Reuters) - Britain's blue-chip index
rebounded on Friday from sharp falls in the previous session,
with good earnings and an optimistic global economic outlook
pushing the market back towards four-and-a-half year highs.
    The FTSE 100 rebounded after two days of falls which
nevertheless failed to significantly dent the index's best
January since the 1980s.
    The index added to early gains in afternoon trade, buoyed by
non-farm payrolls jobs data out of the United States.
    Even though the index dipped immediately after the data,
which showed jobs added last month coming in slightly below
expectations, strong revisions to the previous months' figure
helped the index to add an extra 0.6 percent before the close. 
    "Payroll data was very close to consensus, but the
encouraging point was the previous month's revisions which were
around the 200,00 mark," said James Butterfill, global equity
strategist at Coutts. 
    "The three month average change is now 200,000, which is
indicative of a more established economic recovery."
    The FTSE 100 index closed up 70.36 points, or 1.1
percent at 6,347.24 points - its biggest gain since the first
trading day of the year and enough to push it back to near its
best level since May 2008.
    Every sector ended in positive territory, with the
heavyweight basic materials market adding over 16 points to the
index, boosted by renewed optimism over the global economy.
    The sector benefited in morning trade from data showing euro
zone manufacturers enjoyed their strongest month in nearly a
year in January. 
    The top gainer however was BT. The telecom provider
surged 7 percent in volume of 1.8 times its 90-day average after
reporting better-than-expected profits on strong demand for
broadband services. 
    "BT has achieved much in turning around what had been a
flailing former monopoly," Richard Hunter, Head of Equities at
Hargreaves Lansdown Stockbrokers, said. 

FTSE'S FEBRUARY FILLIP
    The FTSE 100 closed higher in the first trading session of
the month for the 12th time in 13 months.
    Despite falling in the last couple of sessions of January,
the FTSE has enjoyed its best start to the year since 1989. Its
gain of 6.4 percent in January outstripped the index's rise for
the whole of last year.
    "From a chartist point of view, the FTSE 100 remains in
rally mode and failed to validate any reversal signal," said
Trading Central technical analyst Nicolas Suiffet.
    "On a short term perspective, due to the rapidity of the
rise, a correction could take shape but it would be a buying
opportunity for investors who felt left out."
    

 (Additional reporting by David Brett; Editing by Catherine
Evans)