* FTSE 100 up 0.2 pct
* Still eyeing first December fall in 11 years
* Centrica leads gainers, retailers lag
By Toni Vorobyova
LONDON, Dec 18 Britain's main equity index crept
up in low volumes on Wednesday, with Centrica cheered by
plans for a share buyback but with broad sentiment cautious
ahead of a key policy decision from the U.S. Federal Reserve.
Strong U.S. data has raised expectations that the Fed could
scale back its equity-friendly quantitative easing stimulus as
soon as this month. That in turn has weighed on global stocks.
As a result, Britain's FTSE 100 - whose companies
make a quarter of their sales in the United States - has fallen
for the past six weeks in its longest down run since 2008, and
is on track for its first December loss in over a decade.
But, with most economists still not expecting the Fed move
before early 2014, some investors cautiously bought back into
the market on Wednesday ahead of the 1900 GMT announcement.
"It all rests really on what happens after the market closes
with the Fed announcement on QE tapering, and I think it's
pretty finely balanced," said James Humphreys, deputy head of
research at Duncan Lawrie Private Bank.
"Markets aren't particularly cheap, so an unwinding of QE
could see a bit of de-rating of the market," he added, while
noting that if there is no move from the Fed the markets could
stage a year-end rally.
"It's almost 50-50 at the moment which way it goes."
The FTSE 100 was up 14.55 points, or 0.2 percent, at
6,500.74 points by 1148 GMT, its gains stunted by tough
technical resistance around the 200-day moving average.
Centrica was the top gainer, up 2.8 percent after the energy
company said it would sell its Texas gas-fired power stations
and use the money to extend its share buyback.
"As we have long advocated, an extension of the share
buy-back scheme - especially at the current prices - could bring
better shareholder returns," analysts at Liberum Capital said.
On the downside, retailers were among the top fallers as
broker notes raised concerns about the strength of Christmas
sales and highlighted Kantar data showing major supermarkets
losing market share to discount grocers.
"I have real money account exiting long positions in large
size, with orders dominated in Sainsbury's," said
Jordan Hiscott, senior trader at Gekko Global Markets.
"Importantly, they have just broken through the 200 daily
moving average ... for a conclusive sign this isn't just initial
market over-reaction or 'noise'. I'm looking for a close below
Sainsbury dropped 3.1 percent and Tesco lost 2.0
percent. Marks & Spencer fell 3.8 percent, also hit by
analysts at UBS downgrading the stock to 'neutral' from 'buy'
and forecasting lower gross margins.
"We prefer exposure to the electricals/hardlines stocks over
the Christmas period as high levels of promotion and consumer
preference for bargains looks to be creating a recipe for
disappointment amongst the clothing retailers," they wrote.