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UPDATE 1-FTSE rises for third straight day, bolstered by miners
February 7, 2014 / 5:05 PM / 4 years ago

UPDATE 1-FTSE rises for third straight day, bolstered by miners

* FTSE up 0.2 percent

* Miners outperform, get fillip from steelmakers

* Tate bolstered by double JPMorgan upgrade

* Shire weakens on trial failures

By Tricia Wright

LONDON, Feb 7 (Reuters) - Britain’s top shares rose for a third straight session on Friday, led by mining companies, which were helped by an upbeat outlook from steelmaker ArcelorMittal .

UK equities sold off after a disappointing U.S. jobs report, then recovered on confidence that shares will continue to benefit as global economic growth picks up speed.

Data showed that U.S. employers hired fewer workers than expected in January. Non-farm payrolls rose by 113,000, compared with a consensus forecast of 185,000, although the unemployment rate hit a five-year low of 6.6 percent.

The FTSE 100 closed up 13.40 points, or 0.2 percent, at 6,571.68 points. It had dropped to a session low of 6,540.81 just after the jobs report was released.

“There are algos that sell immediately after the payrolls number if it’s weaker than expected, but then people look at the overall picture, which is not that bad, and buy back on the dips,” said Mike Reuter, a broker at Tradition.

Supporting the view that the figures were not as bad as they first appeared, Dallas Federal Reserve Bank President Richard Fisher told CNBC that weather probably held down employment in both December and January.

Cyclical miners advanced, supported by reports from steelmakers ArcelorMittal and SSAB.

The UK mining sector, headed for its second straight week of gains, is up nearly 2 percent for the year after falling 16 percent in 2013.

Sweetener maker Tate & Lyle advanced 1.8 percent. Traders cited a double upgrade by JPMorgan, to “overweight” from “underweight”, as the catalyst for the move.

Shire fell 0.6 percent in brisk trade after Vyvanse, a top-selling medicine for hyperactivity, failed in two late-stage clinical trials to successfully treat adults with major depressive disorders.

Some traders saw scope for a further near-term sell-off in Shire, up more than 9 percent in 2014 against a drop of 2.6 percent on the broader FTSE 100. Its recent gains have been driven partly by speculation of a takeover attempt on the pharmaceuticals group.

“I think it should go down more; it’s obviously a blow to the company ... I think you’ll see a quite negative pull-back to 28 ($45.9) quid,” said Joe Rundle, head of trading at ETX Capital.

“If there’s a big sell-off in the stock (to 28 pounds) bid speculation will come back ... into play in a more serious manner,” he said. Such a drop would take the shares some 10 percent below the current 3,122 pence level.

Trading volume in Shire stood at 2-1/2 times its 90-day daily average.

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