UK's FTSE recovers as Chinese data boosts mining stocks

Thu Aug 8, 2013 11:40am EDT

(Updates with closing prices in para 3, bullet point)
    * FTSE 100 up 0.3 pct after four days of losses
    * 2013 laggard Aviva rises after posting higher H1 profits
    * Schroders succumbs to profit-taking from record highs

    By Toni Vorobyova
    LONDON, Aug 8 (Reuters) - Britain's benchmark equity index
broke a four-day losing streak on Thursday as forecast-beating
trade data from China, the world's biggest metals consumer,
lifted mining stocks.
    China's exports and imports both rose more than expected in
July, in a tentative sign of economic recovery. 
    The basic materials sector added 12 points to Britain's FTSE
100, led by gains in Antofagasta and Anglo American
.
    The blue-chip index, where miners are the
third-biggest sector, closed up 0.3 percent or 18.47 points at
6,529.68, recovering after a 1.4 percent fall the previous
session.
    "That (Chinese data) put all the market participants on the
right footing and led the sentiment on global economy towards
the fact that China will not derail the recovery," said Stephane
Ekolo, chief European equity strategist at Market Securities.
    "The bulls are dominating the market right now ... I think
the UK might outperform continental Europe because you have the
housing market that is starting to do pretty well and some other
companies doing well," he added.
    Aviva was the biggest riser, up 7.6 percent. Higher
first-half profits lured investors into shares in the insurer,
which had lagged the market since a spring dividend cut.
 
    Overall though, the results season has been mixed with about
44 percent of the FTSE 100 companies who have reported
second-quarter earnings missing forecasts, according to
StarMine.
    On the downside, fund manager Schroders slipped 5.3
percent after bigger-than-expected outflows in June prompted
profit-taking on a stock that set record highs earlier this week
and is up 40 percent since the start of 2013. 
    Not everyone was convinced by the FTSE 100's ability to
sustain the rebound, especially after Wednesday's monetary
guidance from the Bank of England raised the possibility that
interest rates could rise sooner than previously expected.
    Steve O'Hare, analyst at First 4 Trading, recommended
selling the index in front of 6,550, with a stop at 6,580 and
the first downside target at 6,485.

 (Editing by Pravin Char, Ron Askew)
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