* FTSE 100 up 0.4 pct
* Commodity-related stocks rally as Yellen fuels QE fire
* Vedanta falls after results
* IAG succumbs to profit-taking after lifting guidance
By David Brett
LONDON, Nov 15 Britain's top shares rose on
Friday, bolstered by the prospect of continued U.S. monetary
stimulus and technical support, with energy stocks and miners
posting the biggest gains.
London's blue chip index gained 27.31 points, or 0.4
percent, to 6,693.44, after the Federal Reserve's
chairman-designate Janet Yellen defended the bank's quantitative
easing programme (QE), dispelling concerns about an early
reduction of the asset purchases.
"Profit-taking will be minimal on the FTSE while it holds
above the 6,650 support level on a daily closing basis. However,
if it breaks this level then I expect to see a sharp pullback
towards the 200-day average, currently around 6,490," Fawad
Razaqzada, technical analyst at Gain Capital, said.
With risk appetite boosted by Yellen's comments, cyclical
stocks such as miners and oils found
London-based mining conglomerate Vedanta Resources,
however, was the standout laggard in the sector, tumbling 6.7
percent after reporting a 14 percent fall in first-half core
Traders said there was some concern about Vedanta's debt
levels, increase in working capital, the capex at Cairn India,
and the fact that the restructure/consolidation is not complete.
The United States' QE programme remains a major backbone for
the UK's benchmark index, which has risen nearly 20 percent in
the past year as investors have moved out of safe bonds and into
higher-yielding assets, such as stocks.
That, however, has left the index trading on a 12-month
forward price/earnings ratio of 12.7 times, above its 10-year
average of 12, Thomson Reuters Datastream shows. Some traders
saw scope for a sell-off.
"The market seems to have gotten a little ahead of itself
based on Yellen with bullish sentiment at a high, but the
internal's getting weaker. Taking a little off the table is my
preferred strategy right now," Lex van Dam, hedge fund manager
at Hampstead Capital, said.
There was profit taking in British Airways owner IAG
, which fell 2.9 percent despite raising its 2015 profit
target. The stock has doubled in value in 2013, making it the
best performer on the FTSE 100.
Utility group Centrica fell 0.6 percent, extending
falls for a second day as a string of analysts cut their target
prices for the stock after a profit warning on Thursday.
"On one hand, profits are being eroded by competitive
pressures in energy retail and power generation; on the other
the ... rhetoric in the media is hostile due to perceived
profiteering," JPMorgan said in a note.
"Until the public and political climate becomes more
constructive, we see limited share price upside for either
Centrica or (peer) SSE."
Shares in SSE slipped 0.1 percent.