* FTSE up 0.2 percent
* Shell rallies as BP backs Brent Crude reforms
* Retailers rally, Tesco upgraded by Exane
* Ocado bolstered by rehashed bid speculation
* Barclays gains ahead of results
* ARM falls as big seller hits
By David Brett
LONDON, Feb 11 Britain's FTSE 100 was lifted on
Monday by strength in energy stocks and food retailers, but the
index was still struggling to break through the four-and-a-half
year highs hit at the start of February.
London's blue chip index gained 13.13 points, or 0.2 percent
at 6,277.06, holding within the 70-point range of the last five
days and below the psychologically important 6,300 level.
"We have had such a strong run it is healthy to pause for
breath and I am still in the camp that this is just a pause
before we move on a bit further," James Burns, fund manager at
Smith & Williamson, said.
"If you look at the last ten days or so the market tries to
drop off a bit and within a day it has rebounded, so it seems as
though there's money waiting to get in and people do not want to
wait for a five percent drop because it is not getting there,"
Energy shares finished the day strongly with heavyweight
Royal Dutch Shell rising 1.0 percent after BP
backed a move by the firm to head off a liquidity crunch in the
Brent crude market.
Consumer staples such as food retailers added 4.5 points to
the FTSE 100 with Tesco up 1.5 percent after Exane BNP
Paribas upgraded the firm to "neutral" from "underweight" on
valuation grounds, and saying that downside risks have also been
Online grocer Ocado jumped 7.5 percent, extending
recent gains following its trading update last week and on
rehashed talk of a large retailer without online presence
possibly making a bid for the company.
"There has been talk doing the rounds for while that someone
like Morrisons (without an online presence) potentially bidding
for Ocado, but the positive update last week has forced many
bearish houses to turn more positive on the stock," a
London-based trader said.
Wm Morrison shares rose 2.4 percent. Ocado,
meanwhile, remains heavily shorted, with 77.5 percent of
lendable shares out on loan as of Feb. 7 - the highest
utilisation rate for any FTSE 250 company, according to Markit
HITTING THE BARRIER
The gains were not enough to push the FTSE 100 through the
6,300 barrier, a level which it has failed to close above since
the end of January.
"Upward support remains and as long as the FTSE 100 can
close above 6,300 it can start to attack the recent highs of
6,362, but I do not see that happening this week," a
London-based technical analyst said.
The deadlock in the U.S. over budget reform and political
elections in Italy and Germany over the months ahead are among
the main macro worries keeping indexes from pushing higher.
"In this environment, we continue to favour qualitative
companies and funds," Rob Burgeman, director at Brewin Dolphin
Investment Management, said in a note to clients.
"Well diversified portfolios should continue to offer
investors excellent potential for growth in both capital and
income over the medium term, notwithstanding the inevitable
squalls along the way," he said.
Financials - a broad based sector including banks, insurers
and asset managers - added 5.6 points to the FTSE 100.
Barclays rose 1 percent with the Financial Times
reporting the bank was seeking to cut spending by 2 billion
pounds - a tenth of its annual cost base - ahead of results on
Among the insurers Admiral Old Mutual and
Prudential and Resolution rose as much as 1.7
percent after BofA Merrill Lynch said it remained relatively
bullish on those UK names despite a strong performance in 2012.
On the downside, chip designer ARM shed 1.7 percent
losing ground after a rally that had sent it to a 12-year high,
with traders citing a large sell-order from an institution as
the principal reason for the stock's decline.
European data centre operator Telecity fell 4.2
percent in good volume with traders citing caution heading into
the firm's full-year results due out on Wednesday, with Liberum
recommending investors to go short on the stock as 2013 and 2014
estimates look vulnerable to downgrades.
(Written by David Brett; Editing by Toby Chopra)