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Britain's FTSE buoyed by financial stocks, UK data
August 6, 2013 / 11:01 AM / 4 years ago

Britain's FTSE buoyed by financial stocks, UK data

* FTSE 100 flat at 6,617.19 pts

* StanChart, L&G rally after results

* Strong British data boosts retailers

* Gold miners hold back index as Fresnillo cuts payout

By Francesco Canepa

LONDON, Aug 6 (Reuters) - Britain’s blue-chip share index bounced off early lows to trade broadly flat on Tuesday, helped by British economic data and strong earnings from financial firms Standard Chartered and Legal & General.

The FTSE was down 2.4 points, flat in percentage terms, at 6,617.19 points at 1019 GMT. It rebounded from an intra-day low, at 6,598.64, after data showed British industrial output rose much faster than expected in June.

The report built on recent positive housing market, retail sales and services data.

Shares in supermarket chain Tesco extended gains after the output data indicated the UK economy is improving, to trade 1.1 percent higher. The impact on the broader index was limited, however, given that only a quarter of UK blue chips’ revenues come from Britain, with the rest equally split between Europe, the United States and the rest of the world.

“There will be more money being spent by the UK retail audience and therefore investors who are looking to get exposure to UK blue-chip stocks should look at the main high-street brands,” Rebecca O‘Keeffe, head of investment at Interactive Investor, said.

Insurer Legal & General and Asia-focused bank Standard Chartered also helped buoy the FTSE, adding a combined 6 index points after trading updates.

Legal & General rose 3.5 percent to 204.3 pence after unveiling a larger-than-expected dividend increase following solid first-half results. That prompted Panmure Gordon to raise its target on the stock to 235 pence from 205 pence with a “buy” recommendation.

Standard Chartered also gained 3.5 percent as upbeat comments from management on the outlook eased concerns about the bank’s exposure to a growth slowdown in emerging markets. That lured investors back into the shares after an 8 percent fall in the past three months.

“Investors are picking up the stock in post-results trading, following a generally robust set of numbers and a slightly brighter outlook,” Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said in a trading note.

“There are improvements to operating income, earnings per share and the dividend, against slight declines in the capital cushion and return on capital.”

Pegging back the FTSE was miner Fresnillo, skidding 5.7 percent after saying it would slash its dividend due to falling gold prices. Peer Randgold Resources fell 3.3 percent.

According to Thomson Reuters StarMine data, about 63 percent of STOXX Europe 600 index companies have reported results so far, of which around 56 percent have met or beaten profit forecasts. (Editing by Susan Fenton)

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