Robust US data helps position UK shares for biggest weekly gain since Jan
* FTSE 100 up 0.4 pct at 6,613.85 pts
* Index on track for biggest weekly gain since Jan
* Strong U.S. data underpins optimism
* Carnival leads gainers as outlook improves
By Francesco Canepa
LONDON, Dec 20 (Reuters) - Britain's top share index was on course for its biggest weekly gain since January after rising for a third straight session on Friday, boosted by strong U.S. data and a rally in cruise operator Carnival.
The U.S. economy grew at its fastest pace in almost two years in the third quarter, revised data showed on Friday, underpinning optimism that the world's largest economy can stand on its own as the Federal Reserve starts to reduce its stimulus programme.
"We've seen an absolute surge in positive data from the U.S.," said Ramin Nakisa, a global macro strategist at UBS in London.
"We think this is a clarion call for risk assets into 2014. Our biggest overweights are in Europe and in the UK (because) in terms of valuations the U.S. looks more richly valued."
Britain's FTSE 100 traded at a 14 percent discount to the U.S. S&P 500 index, Datastream data showed.
By 1543 GMT, the FTSE was up 29.15 points, or 0.4 percent, at 6,613.85 points on the day and up 2.7 percent on the week, leaving it set to snap a six-week losing streak and mark its best week since January.
The weekly gain comes after the Fed said on Wednesday that it would begin to slow its open-ended asset purchase programme but committed to low interest rates for longer.
Shares in Carnival rose 3.3 percent as strong results made analysts more confident the company is restoring its reputation after a series of incidents.
Volume on the stock was nearly three times its full-day average for the past three months, compared to 90 percent of the average for the FTSE.
"We like the business of Carnival and see potential upside from a brand recovery," Atif Latif, director of trading at Guardian Stockbrokers, said.
Defence company BAE Systems fell 4.7 percent after saying the United Arab Emirates had quit talks to buy the Eurofighter Typhoon aircraft, which analysts at JP Morgan described as a major blow.
Volume on the FTSE jumped after the expiry of December options, when 760,160 options to sell the index at 6,600, equal to 2.5 percent of the total open interest in puts, expired, according to Liffe data.
"There were a lot of puts that expired and that means investors are not hedged for any fall," Andy Ash, head of sales at Monument Securities, said.
"That tends to be a dangerous sign. It means when you do get a fall they will get more panicked."
- Malaysia military tracked missing plane to west coast: source |
- Malaysia air probe finds scant evidence of attack: sources |
- Ukraine appeals to West as Crimea turns to Russia |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- Freescale loss in Malaysia tragedy leads to travel policy questions