Britain's FTSE hits 3-week high, focus on U.S. jobs data

Thu Jul 3, 2014 4:30am EDT

* FTSE 100 index rises 0.3 percent

* Focus on U.S. jobs data, ECB meet

* Vodafone gains, Balfour Beatty slumps

By Atul Prakash

LONDON, July 3 (Reuters) - Britain's top share index climbed to a three-week high on Thursday on expectations that U.S. non-farm payrolls numbers, due later in the session, will beat forecasts.

The blue-chip FTSE 100 index has been trading in a range of about 200 points since May, compared with a band of about 450 points in the first four months of 2014. The index was up 0.3 percent at 6,838.08 points by 0806 GMT after rising as much as 8,844.05, the highest since mid-June.

Investors have been waiting for catalysts to lift it out of the trading range. Analysts said solid economic data and encouraging company results could push the market towards a record high. The FTSE 100 is less than 2 percent away from its peak of 6,950.60, set in late 1999.

Investors focused on U.S. non-farm payrolls, which analysts polled by Reuters said probably rose by 212,000 jobs after rising by 217,000 in May. Some analysts said Wednesday's data - showing U.S. private-sector hiring at a 1 1/2-year high in June - had raised expectations that non-farm data will also come in better than expected.

"The U.S. labour market data has been quite healthy recently and it should reinforce confidence about the strength and breath of the U.S. recovery. It should be good for equities," Daniel McCormack, strategist with Macquarie, said.

"We may set new highs after the summer, but it largely depends on two things - earnings and corporate activity. If M&A (merger and acquisition) continues, then that would be a powerful support for the market."

Investors will also look for the European Central Bank to provide some details of its new stimulus measures after its meeting later in the day.

Among some sharp movers, Vodafone rose 1.4 percent after the European Commission said it had approved the company's 7.2 billion-euro ($9.79 billion) acquisition of Spain's largest cable operator, Ono, without conditions.

But mid-cap Balfour Beatty fell 11 percent after the infrastructure group said trading at its mechanical and electrical engineering division had worsened.

Charts suggested gains for the broader market. Bill McNamara, technical analyst at Charles Stanley, said that the FTSE 100's close on Wednesday above its 50-day moving average raised expectations the move higher might run a bit further.

He said the next area of potential resistance was seen at around 6,840 points, and if the index exceeded that level, it would be in a strong position to test this year's highs at around 6,880 points. (Reporting by Atul Prakash; Editing by Larry King)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.