Britain's FTSE extends recovery from lows
LONDON (Reuters) - Britain's top share index rose on Wednesday, building on a rally in the previous session, as solid U.S. economic data reassured investors concerned about the prospect of diminished stimulus from the Federal Reserve.
The FTSE 100 .FTSE was up 27.86 points, or 0.5 percent, at 6,129.77 by 0802 GMT, having risen 1.2 percent in the previous session.
The UK benchmark had fallen some 12 percent over the last month after hitting a 13-year high of 6,875.62 in late May.
"A bit of stabilization... I think investors are still trying to make up their minds whether good economic data is good for stock markets given it brings the prospect of (Fed stimulus)tapering that much closer," said Michael Hewson, analyst at CMC Markets.
"I think at the moment we're going to maintain the level of volatility that we've seen thus far while cash moves around and gets reallocated," he said.
Chip designer ARM Holdings (ARM.L) was a good gainer on Wednesday, up 1.9 percent in brisk trade, with traders citing a rating upgrade from Natixis to "buy" from "neutral".
Volume in the stock was robust at around a third of the 90-day daily average against the FTSE 100 on just 11 percent.
Data on Tuesday showed strong gains in U.S. business spending plans and the largest annual rise in house prices in seven years, supporting the Fed's recovery view and driving a near 1 percent rise on the S&P 500 .SPX, its biggest gain in almost two weeks.
"The FTSE is now starting to move into buy territory, being down (so much) from a month ago," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million in assets.
"However, that is subject to the U.S. markets stabilizing ... which does have a large question mark," he said, adding that data releases from the United States, which have proved a mixed bag recently, will help determine the direction of the markets.
These include the June U.S. jobs report, set for release next Friday.
Technical analysts pointed to the 6,164 level, the 200-day moving average, as the next major level of resistance for the FTSE 100.
A break below this level last week was very bearish for the index, according to Alpari analyst Craig Erlam, and a failure to recapture it would go some way to confirming this negative outlook, he said.
(Reporting by Tricia Wright)
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