* FTSE 100 gains 0.2 percent
* Financials add over 8 points to the index
* Barclays boosted by proposed cuts
* Index rangebound but technical picture looks rosy
By Alistair Smout
LONDON, Feb 11 Britain's blue-chip index edged
up on Monday, supported by resilient banking shares after
posting its first weekly loss this year last week.
Barclays rose 1.4 percent to account for a third of
the index's rise in early trade, with the Financial Times
reporting that the bank was seeking to cut spending by 2 billion
pounds - a tenth of its annual cost base.
"The reported cuts are what is driving Barclays this
morning. However, we've not seen the same positive movements in
the credit or options market, where Barclays has performed much
as any other large European bank," Simon Maughan, strategist at
Olivetree Financial Group, said.
"Equity markets are all aflutter about (CEO Antony) Jenkins'
presentation tomorrow, while credit and option markets expect
nothing to change."
Financials - a broad based sector including banks, insurers
and asset managers - added 8 points to the FTSE 100
By 0916, the index was up 12.19 points, or 0.2 percent, at
6,276.12, having fallen 1.3 percent last week.
The index has traded in a narrow 140 point range for the
last 2-1/2 weeks and is still struggling to return to recently
established four and a half year highs. Losses spurred by the
return of concerns about Italy and Spain's fate in the euro zone
debt crisis have hinted that a bull run at the start of 2013 -
January was the strongest since 1989 - has run out of steam.
Nick Xanders, head of European equity strategy at BTIG, said
the scandal at Europe's oldest bank Monte Paschi had added to
uncertainty over the outcome of Italian elections, and also
pointed to the lack of a deal over spending cuts in the United
"The early momentum across the index has waned," he said. "I
think you've got to take a little bit of money off the table and
I think you've got to own a little bit of volatility as
protection to the downside, whether its 'puts' in the FTSE or in
individual names," he said.
The technical picture still looks relatively rosy.
"The widening of yields in Spain and Italy was a timely
reminder that the euro zone retains the potential to send stocks
into a sudden swoon. This reversal has, unsurprisingly, caused
the FTSE to lose some of its upside momentum - but not to the
extent that it has slipped back through its short-term uptrend,"
Bill McNamara, technical analyst at Charles Stanley, said in a
"As long as this line remains intact it is reasonable to
assert that the bull case for the UK index is very much
(Editing by Patrick Graham)