* FTSE 100 up 0.2 pct
* Motor insurers rally as pricing competition eases
* Shell profit knocks index to underperform peers
* Set for best week of 2014
By Francesco Canepa
LONDON, Jan 17 Britain's top share index edged
higher on Friday and was on track for its best weekly gain this
year, lifted by strong UK retail sales data and a rally in motor
Insurer Admiral Group rose 5.4 percent to the top
of the FTSE 100 as data showed a multi-year decline in
car insurance prices slowed in the last quarter of last year,
potentially opening the door for some earnings upgrade for
shares in the industry.
"The trend would be consistent with a stabilisation and,
hopefully, an improvement in prices sometime in 2014," said Ben
Cohen, an analyst at Canaccord Genuity.
"We are in an environment where there hasn't been a lot of
upward earnings revision across the whole sector and investors
are keen to buy into sub-sectors where you've got some signs of
positive earnings momentum."
Analysts have cut their profit estimates for insurers in
Britain's FTSE 350 index by 0.7 percent in the past
three months, with non-life insurance companies such as eSure
, Direct Line and RSA Insurance Group
suffering some of the steepest downgrades.
The three stocks rose between 1.6 percent and 4.6 percent on
Friday, with the broader FTSE 350 non-life insurance
up 1.5 percent.
The blue-chip FTSE 100 index was up 11.27 points, or
0.2 percent, at 6,826.69 points at 1210 GMT. The index is up 1.3
percent so far this week, its biggest rise since late last year.
Sentiment was also supported by data showing British
retailers reported the fastest annual sales growth in more than
nine years in December, with activity expanding at more than
double the expected pace.
On the downside, Royal Dutch Shell's two listings
knocked a combined 12 points off the FTSE after the oil
major warned its fourth-quarter figures are expected to be
significantly lower than recent levels of profitability because
of oil and gas prices and problems with its refining business.
"When you're talking about higher costs and lower production
volumes, it's a lethal combination," Nick Xanders, who heads up
European equity strategy at BTIG, said.
"It's symptomatic of the entire market, with costs rising
but revenues not coming through. Some hope that it's a company
specific thing, but I don't think it is."
Miners extended a bounce after Rio Tinto's good
results on Thursday. The sector is up 7.5 percent this week.