* FTSE 100 up 0.1 percent
* Johnson Matthey rises on bullish JPMorgan note
* RBS falls on broker downgrade, U.S. sale talk
By Tricia Wright
LONDON, Oct 14 Britain's top shares inched
higher on Monday, extending gains from the previous two
sessions, led by catalytic converter maker Johnson Matthey on
the back of an analyst rating upgrade.
Analyst comments moved the prices of a number of FTSE 100
stocks on Monday while many investors remained preoccupied by
the U.S. budget standoff.
Johnson Matthey rose 4 percent as traders cited an
upgrade from JPMorgan to "overweight" from "neutral". "Johnson
Matthey is at an inflection point," JPMorgan said, seeing
potential upside of 35 percent to the current price.
"We expect years of investment in the industrial catalyst
market to lead to accelerated growth, benefiting from the swathe
of new customer capex driven by Chinese petrochemical
self-sustainability and the U.S. shale gas revolution."
Croda and Bunzl, meanwhile, were both off
1.6 percent after downgrades from JP Morgan.
The FTSE 100 was up 9.20 points, or 0.1 percent, at
6,496.39 points by 1052 GMT, having added 2.4 percent over the
previous two sessions.
U.S. Senate negotiations to resolve the country's fiscal
crisis showed some progress on Sunday and, while there were no
guarantees the federal government shutdown is to end, traders
expect a deal to lift the borrowing ceiling.
Although the FTSE 100 index dipped below its recent range
last week, it staged a rapid recovery, highlighting that there
are plenty of buyers willing to step in on weakness.
"The market's telling you that most participants still think
a deal's going to get done pretty shortly; every time we dip
between half and one percent it immediately gets bid back up
again," Matt Basi, sales trader at CMC Markets, said.
Basi reckoned that the UK benchmark could rise by another
200 points heading into year end if a deal were to be clinched
in the coming days.
Charles Stanley technical analyst Bill McNamara, while
ultimately envisaging a rise of similar magnitude on the FTSE
100, cautions against further nervous trading in the near term.
"If no agreement is reached by Thursday, a re-examination of
last week's lows (6,316) looks all too likely," he said.
Congress has until Oct. 17 to raise the debt ceiling, or
Downbeat analyst comment also weighed on Royal Bank of
Scotland on Monday, off 1.6 percent, knocked by a
downgrade to "underperform" by BofA Merrill Lynch and negative
reaction to media talk of a raid on its U.S. retail banking
business, according to traders.
(Editing by Ruth Pitchford)