Britain's FTSE advances, defensive stocks support

Wed Dec 11, 2013 7:34am EST

* FTSE 100 index rises 0.3 pct by midday

* Defensive stocks among top gainers

* Petrofac advances on technical buying

By Atul Prakash

LONDON, Dec 11 (Reuters) - Britain's top share index edged higher on Wednesday, with lingering uncertainty over the U.S. Federal Reserve's monetary stimulus programme prompting investors to buy defensive stocks.

The blue-chip FTSE 100 index was up 0.3 percent at 6,540.84 points by 1204 GMT, supported by sectors generally seen as defensive plays. Drugmakers AstraZeneca and Shire rose 1.2 percent and 0.7 percent respectively, while BT Group rose 0.9 percent.

"Some defensives are coming into play on concerns of tapering talks," Tom Robertson, senior trader at Accendo Markets, said.

"If the Fed keeps its policy unchanged after the next week's meeting, the market would bounce back," he said, adding that the market is likely to be stuck in a tight range until the Fed meeting next week.

Although the FTSE 100 remains up by around 11 percent since the start of 2013, it has failed to break above a 13-year peak of 6,875.62 points reached in late May this year.

It has been trading in a narrow range since falling to a seven-week low earlier this month, with a recent run of strong data and comments from policymakers raising concerns that the Fed might even announce a cut in its bond-buying operations next week.

However, investors looked for individual stocks which had the potential to gain on specific news or on technical grounds.

Aerospace and defence group BAE Systems rose 1.9 percent to feature among the top of the FTSE 100, with traders attributing the advance to greater visibility on U.S. military spending after a budget deal in Washington.

Oil services firm Petrofac, up 2.1 percent, climbed to the top of the FTSE gainers' list in a technical rally after falling to a two-year low and witnessing "oversold" trading conditions.

On the downside, part-nationalised Royal Bank of Scotland was the worst-performing FTSE 100 stock as it fell 2.4 percent after its finance director Nathan Bostock resigned to join rival Santander.

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