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Britain's FTSE buoyed by signs of economic strength
August 23, 2013 / 3:02 PM / 4 years ago

Britain's FTSE buoyed by signs of economic strength

* FTSE 100 up 0.8 percent

* Signs of pick-up in global growth bolster sentiment

* Croda leads, Deutsche Bank upgrades to “buy”

By Tricia Wright

LONDON, Aug 23 (Reuters) - Britain’s blue chip shares advanced on Friday on signs that the country’s economic recovery is taking hold, with specialty chemical maker Croda International leading the gains on a rating hike from Deutsche Bank.

By 1442 GMT, the FTSE 100 was up 51.10 points, or 0.8 percent, at 6,497.97 points, building on the previous session’s 0.9 percent rise and trimming its monthly loss to 1.9 percent.

While markets have been jittery in recent weeks on the prospect of the U.S. Federal Reserve starting to reel in its stimulus programme, which has lifted global equities, that was offset by signs that Britain’s economic growth is gaining steam.

The UK economy grew more than first thought in the second quarter, data showed on Friday, following a batch of upbeat macroeconomic news from around the world on Thursday. Germany also confirmed its solid second-quarter growth.

“The corrective pull-back that the FTSE’s had could be described as a little bit overdone especially in light of the broadly positive data that we’ve been seeing,” Alastair McCaig, strategist at IG, said.

Croda International, up 4.6 percent, was the biggest gainer by some margin, with traders citing Deutsche Bank’s upgrade of the stock to “buy” from “hold” on the view that top-line growth is set to pick up.

“Top-line growth has slowed over the past year ... We view this slowdown as cyclical rather than structural and expect sales growth to accelerate driven by a resumption of growth in Crop Care and Personal Care,” the bank said in a note, referring to two divisions of the company.

GFT Markets analyst Fawad Razaqzada, however, sounded a note of caution about the FTSE 100, unwilling to say that the index, up around 9 percent this year, is back on its long-term bullish trend until it breaks through several resistance levels - at 6,500, 6,550 and 6,640. (Editing by Hugh Lawson)

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