* FTSE 100 flat, 2013's peak of 6,875 in sight
* Miners strong, Citi lifts position on sector to "bullish"
* Index seen making all-time high in January - analysts
By Tricia Wright
LONDON, Jan 16 Britain's top shares steadied
near last year's peak on Thursday, propped up by steep gains
from miners on optimism over the global economy and upbeat
Miners added the most points to the FTSE on Thursday. The
FTSE 350 Mining Index rose 3.2 percent while Rio
Tinto firmed 2.5 percent after reporting big increases
The blue-chip FTSE 100 index, which on Wednesday had
closed at an eight-month high, closed down 4.44 points, or 0.1
percent, at 6,815.42 points - hovering close to its 2013 high of
The UK benchmark has broken out of a technical analysis
pattern called a "bullish flag", sending a positive signal, with
the index now not far off its record high.
"This (the break out of the flag pattern) should take it to
its all-time high at 6,950 in January. It will be helped by
mining stocks which are in a position to gain some 9 percent
over the same period," Valerie Gastaldy, head of technical
analysis firm Day-By-Day, said.
Despite strength seen already in equities, analysts remain
positive given encouraging signs from the world's largest
economy, with data on Thursday showing a drop in U.S. jobless
claims suggesting a sharp step-down in job growth in December
was likely to be temporary.
Question marks remain over whether the overall market
justifies such high valuations after a bumper 2013, but a
significant underperformance seen from the miners last year has
restored value to the sector.
"If you are to make an investment case for the FTSE I think,
almost by definition now, that involves being more upbeat and
more positive on the resources plays," Ian Richards, head of
equity strategy at Exane BNP Paribas, said.
The mining sector was the worst-performing equity sector in
2013, dogged by concerns over a possible slowdown in economic
growth in China, which is the world's biggest metals consumer.
It trades on a 12-month forward price/earnings ratio of 11.1
times, against the FTSE 100 on 12.9 times, according to Thomson
Analysts at U.S. bank Citigroup on Thursday published an
upbeat note on the sector.
Citi upgraded its rating on the sector to "bullish" from
"neutral" - marking the first time it had taken such as position
on the mining industry in three years.
The U.S bank said an upturn in the European and U.S.
economies could offset any slowdown in China.
"Improvements in European and U.S. growth are supportive for
commodities and weakening commodity currencies are providing a
fillip for the miners," it wrote in a note.
The FTSE 100 rose 14.4 percent in 2013 to post its best
annual gain since 2009. The index has gained around 1 percent
since the start of 2014.