January 23, 2013 / 11:51 AM / 4 years ago

Strong start to earnings lifts British shares

3 Min Read

* FTSE 100 index adds 0.1 percent
    * Unilever's "stellar" results lead index up
    * BHP gains after boosting iron output
    * Most UK, U.S. firms meeting or beating expectations

    By Alistair Smout
    LONDON, Jan 23 (Reuters) - Britain's top share index rose on
Wednesday with strong earnings from Unilever marking a positive
start to the full-year results season.
    The global consumer goods firm alone provided
almost three points of a seven point gain on the FTSE 100 index
, its 2.7 percent rise in strong volume leading blue-chip
    Unilever earlier reported underlying sales growth of 6.9
percent for 2012, beating forecasts of 6.5 percent, propelled by
double-digit growth in emerging markets. 
    "They've put in a stellar set of results," Basil Petrides,
trader at Hartmann Capital, said, although with the stock at
all-time highs, he was looking for a dip before buying.
    At 1132 GMT, the FTSE 100 index was up 6.86 points, or 0.1
percent, at 6,186.03 points. Ex-dividend factors clipped 1.97
points off the index, with contractor caterer Compass Group
 and utility Scottish & Southern Energy both
trading without entitlement to their latest payouts.
    BHP Billiton also lent strength after posting
results, up 1.1 percent and providing 2.4 points of the index's
    The global miner boosted iron ore output by 3 percent in the
December quarter, racing to supply more of the raw material to
Chinese steelmakers despite signs of a softening market.
    BHP's advance helped to lift the heavyweight mining sector
 to gains of 0.3 percent.  
    This week has seen the earnings season - already well under
way in the United States - start in earnest in Europe. 
    In the U.S. so far, 68 percent of companies have met or
beaten expectations, with 61 percent of UK companies at least
meeting expectations.
    The Standard & Poor's 500 index rose to a fresh
five-year closing high on Wall Street on Tuesday after Google
 and IBM posted encouraging results.
    "We're still in a bull market on the FTSE. All the focus is
on the U.S. earnings, which have been surprisingly good, and
that's what's driving the markets at the moment, with decent
earnings from the UK supporting sentiment as well," Fawad
Razaqzada, market strategist at GFT, said. 
    "There is no reason that the market should be going down at
this stage."
    Global stocks were also supported after Republican leaders
in the U.S. House of Representatives said they aimed to pass a
bill to extend the U.S. debt limit on Wednesday. 
    The White House said this would remove uncertainty about the
issue, although Razaqzada said that while the move was
supportive, some sort of a deal to avoid catastrophic default
was already priced in. 

 (Additional reporting by Sudip Kar-Gupta and Jon Hopkins;
Editing by John Stonestreet)

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