* FTSE 100 up 0.98 percent
* Thursday's steep fall seen offering buying opportunity
* Implied volatility eases from 2-week highs
By Toni Vorobyova
LONDON, Feb 22 Britain's blue chip shares
rebounded on Friday, with investors using the previous session's
sharp sell-off to dip their toes back into the market at cheaper
levels and technical charts offering some support.
Miners , which have been among the
few sectors to lose ground over the past month, were among the
top performers, recovering some poise alongside higher metals
The FTSE 100 was up 53.86 points or 0.9 percent at 6,345.40
points by 1152 GMT, moving back towards recent five-year highs
after suffering its sharpest one-day fall since July on Thursday
on concerns the U.S. Federal Reserve could end its stimulus
programme sooner than expected -- thus removing a driver of the
recent equity rally.
Despite Thursday's set back, the UK blue chip index, is
still up 7.5 percent since the start of the year in local
currency terms, compared to a fall of 2 percent on the euro
zone's EuroSTOXX 50.
"We've had a bit of a bounce this morning ... The
performance of the stock market has been quite astonishing since
the beginning of the year and people are looking to buy on the
dips," said Andrew Feldhaus, investment manager at
"There is still a school of thought ... that we will have a
correction. But the market shows no signs of going down, there
is still appetite out their for equities," he added,
recommending investors focus on stocks with sustainable
Appetite for risk assets was further bolstered by the jump
in the keenly-watched Ifo German business morale index to a
10-month high in February, beating even the highest of
economists' forecasts and following hot on the heels of a strong
ZEW index earlier this week.
Implied volatility on the FTSE 100 - a crude gauge
of investor risk aversion - eased back from two-week highs.
Technical charts also offered some positivity, with the UK
index bouncing up from the 38.2 percent Fibonacci retracement of
the Feb. 7 to Feb. 20 rally and moving through the 22-day and
10-day moving averages.
"Any upward move today will look a lot like a positive
reaction to technical support, thereby reinforcing the
impression that the uptrend also remains firmly intact," Bill
McNamara, technical analyst at Charles Stanley, said in a note.
Among individual stocks, Melrose Industrials was
the top riser, up 3.8 percent, with traders citing positive
sentiment after news of a takeover bid in the sector.
Private equity firm KKR & Co has submitted an offer
of $75 per share for Gardner Denver Inc, valuing the
industrial machinery maker at close to $3.7 billion, sources
told Reuters on Thursday.
(Additional reporting by David Brett/editing by Chris Pizzey,
London MPG Desk, +44 (0)207 542-4441)