CORRECTED-British shares up from 5-1/2 month low, helped by Chinese central bank

Tue Jun 25, 2013 5:06am EDT

(Corrects analyst's name in 8th paragraph)
    * FTSE 100 up 0.6 pct
    * Gains push 7-day strength indicator out of oversold
territory
    * Rexam top faller after profit warning

    By Toni Vorobyova
    LONDON, June 25 (Reuters) - Britain's FTSE 100 rose from
5-1/2 month lows on Tuesday, with investors seeing value in some
stocks after the recent rout and with sentiment lifted by
efforts by China to reassure markets over money supply.
    Following a squeeze in Chinese money markets and a slump in
stocks, its central bank said it will guide market rates to
reasonable levels, and that recent liquidity issues were due to
seasonal factors. 
    The comments offered some reassurance to global equity
markets, which also took heart from two top U.S. Federal Reserve
officials late on Monday downplaying the likelihood of an
imminent end to monetary stimulus. 
    "Everything has opened on a fairly positive note this
morning ... The market at the moment is very reactive to all the
issues... be it the Fed or China," said Neil Marsh, strategist
at Newedge. 
    "...Hopefully, over the next week or two it will all calm
down and markets will go back to steadily moving higher."
    The FTSE 100 was up 36.40 points, or 0.6 percent, at
6,065.50 points by 0747 GMT, recovering some poise after
sinking some 12 percent over the past month on concerns about an
end to the era of easy global central bank stimulus.
    The rebound helped the UK benchmark move just out of
oversold territory on the 7-day relative strength indicator,
though technical analysts said it was too soon to turn positive.
    "The fact that the 200-day moving average has now been
breached for the first time since November demonstrates the
extent to which the bears are having it all their own way at the
moment and it is hard to escape the impression that they will be
aggressively selling into any rally that follows," Bill
McNamara, analyst at Charles Stanley, said in a note. 
    "In other words, although a bounce now looks likely the
chart is still pointing towards a retreat below 6,000 in the
medium term."
    U.S. durable goods, new homes sales data and a number of
regional sentiment surveys could offer more clues on whether the
world's biggest economy is really strong enough to warrant a
scaling back of equity-friendly stimulus from the Fed.
    The United States - which accounts for around a quarter of
FTSE 100 revenues - has become an increasingly key area for
earnings growth at a time when other parts of the world suffer.
    Weak volumes growth in Europe and South America hurt
performance at Rexam, with the beverage can maker down
4.1 percent after warning that first half operating profits
would be lower than last year. 

 (Editing by John Stonestreet)
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