* FTSE 100 gains 0.3 pct, rebounds from 5-week lows
* Finds technical support at 200-day moving average
* Fed decision in focus
By Toni Vorobyova
LONDON, Jan 28 Britain's blue chip shares picked
up on Tuesday from five-week lows after finding strong technical
support in the face of easing tensions in emerging markets and
prospects of mergers and acquisitions.
Emerging market assets steadied after a three-day slump,
reviving confidence in global risk assets and reassuring
investors worried that companies will be hit by adverse exchange
rate moves, falling demand and increased competition.
Miners, which rely heavily on demand from emerging markets
like China, did well. Rio Tinto rose 2.3 percent and
Anglo American added 1.8 percent.
Aberdeen Asset Management, which invests around a third of
its equities funds and 14 percent of fixed-income portfolios in
emerging markets rose 3.0 percent.
Shares of asset managers also benefited from the prospect of
acquisitions after Bank of Montreal agreed to buy
mid-cap F&C Asset Management. F&C rallied 6.1 percent.
The prospects of deals echoed in the utilities sector, with
media speculation continuing to highlight Severn Trent as a
possible takeover target. Its shares added 4.6 percent.
"I think that (M&A) is going to be a recurring feature and
may be one of the supporting factors for the market," said Peter
Botham, chief investment officer at Brown Shipley.
"We've had two or three bad days because of external events
evolving around emerging markets, but ... investors are a bit
calmer now - having seen a bit of a setback they feel a bit more
comfortable putting money back in the market."
The broad FTSE 100 closed up 21.67 points, or 0.3 percent at
6,572.33 points, rebounding from technical support at the
200-day moving average around 6,556.64 points.
Volumes, however, were in-line with average, with investors
cautious ahead of this week's Federal Reserve meeting. All eyes
will be on whether the Fed pushes ahead with plans to trim its
quantitative easing - a move which could further hit
liquidity-reliant emerging markets.
"The 200-day moving average (on FTSE) coupled with rising
trend-line support from the June 2012 lows is providing a decent
buy-on-dips level," said Brenda Kelly, an analyst at IG Markets.
"Clearly, the jury is out on whether this current bounce is
merely a relief rally ahead of the FOMC statement tomorrow,
where the consensus expectation is for an additional shaving of
$10 billion to the current QE programme."
The FTSE - whose member companies on average make around a
third of their sales outside of Europe and North America - has
fallen 4.2 percent in the past five sessions, hitting five-week
lows and underperforming other European bourses.
In addition to emerging market concerns, investors have been
worried about the full-year 2013 earnings season, now in swing,
and whether it will deliver profits strong enough to justify
relatively elevated valuations.
So far, the signals have been mixed. Underscoring the risks,
Fresnillo fell 3.1 percent after reporting a fall in