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Miners, outsourcers keep Britain's FTSE at 12-year highs
May 21, 2013 / 10:56 AM / 4 years ago

Miners, outsourcers keep Britain's FTSE at 12-year highs

* FTSE up 0.1 pct at 6,760.29

* Capita rises after upgrading estimates, contract win

* M&S climbs on hope of sustained turnaround

* Miners rally as Soc Gen sees Q2 price pick-up

* Carnival falls as it slashes forecasts

By David Brett

LONDON, May 21 (Reuters) - Rallying miners and a contract win for outsourcing company Capita helped steady the FTSE 100 by midday on Tuesday despite weakness in travel firms after disappointing results from Carnival.

By 1011 GMT, London’s blue chip index was up 4.66 points, or 0.1 percent, at 6,760.29, having closed at its highest level since late September 2000 on Monday driven by investors striving for higher returns.

“The surge in equities has been partly down to (central banks’) quantitative easing programmes and calling the top of this rally is proving increasingly difficult,” Lee McDarby, head of dealing at Investec Corporate Treasury, said.

“Any wobble in the index just looks like another buying opportunity,” he said.

Technical analysts said a recent bounce from the 6,710 zone suggests the up-move for the FTSE 100 still has legs and with the highs of 2007 now tested and exceeded, there is little major resistance until the all-time high of 6,950.60 struck in 1999.

Investors looked for signs that companies’ earnings could keep up with the market’s recent re-rating.

Outsourcing company Capita climbed 7.1 percent after winning a 1.2 billion pound ($1.8 billion) contract with Telefonica’s UK O2 mobile phone business

British retailer Marks & Spencer rose 4.6 percent as investors put their faith in a turnaround after the firm posted a profit that was its lowest since 2009, although it just beat consensus expectations.

Miners, down 12.4 percent in 2013 on earnings and pricing concerns, rallied as Societe Generale’s commodities team said the sell-off in base metals prices had been overdone and Chinese restocking would feed a rally.

Although it cut earnings forecasts across the board, Soc Gen’s main stock picks remain Rio Tinto and Glencore Xstrata, which were up 3.1 and 3.3 percent, respectively.

Caps on gains included the travel and leisure sector which was led lower by a 11.9 percent fall in cruise operator Carnival as it slashed its full-year earnings outlook for the second time in less than three months.

Gains for most major European markets have been almost uninterrupted since mid-April and that has prompted Nomura to place a short-term hedge on its European recommended portfolio, although it expects indexes to finish the year above current levels. (Reporting by David Brett; Editing by Ruth Pitchford)

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