Reuters logo
Britain's FTSE higher as mining stocks, Vodafone gain
January 24, 2013 / 9:21 AM / 5 years ago

Britain's FTSE higher as mining stocks, Vodafone gain

* FTSE 100 up 0.1 percent, claws back above 6,200 level

* Miners rise after upbeat China factory data

* Vodafone bolstered by broker comment

* ARM Holdings falls as Apple results disappoint

By Jon Hopkins

LONDON, Jan 24 (Reuters) - Britain’s top share index edged higher on Thursday as strength in mining stocks following upbeat data from China and gains by Vodafone L> offset disappointment at results from U.S. tech giant Apple.

At 0909 GMT in London, the FTSE 100 index was up 9.93 points, or 0.2 percent at 6,207.57, having closed 0.3 percent higher on Wednesday.

Gains by heavyweight mining stocks helped underpin the FTSE 100’s rise, providing more than 4 points of its advance, as the sector responded to encouraging factory data from top metals consumer China.

The HSBC China flash purchasing managers’ index (PMI) rose to 51.9 in January, the highest reading since January 2011 and above the 50-point level that shows accelerating growth in the sector from the previous month.

“Once again China rides to the rescue, buoying the miners and helping the UK blue chips straddle the 6,200 level,” said Mike Mason, senior dealer at Sucden Financial Private Clients.

“However, with this being nose-bleed territory, investors should be cautious about how long the market can cling on.”

Strength in market heavyweight Vodafone also provided a chunk of the FTSE 100’s gains. Its 1.1 percent rise alone added almost 3.5 points to the blue chip index on positive broker comment after the mobile telecoms firm circulated consensus forecasts to analysts ahead of its third-quarter trading update due on February 7.

Espirito Santo Investment Bank, which reiterated its “buy” rating on Vodafone, said in a note that its forecast is in line with the consensus for organic service revenue, which it expects to decline by 2.4 percent year-on-year.

Goldman Sachs also reiterated its “buy” stance on Vodafone, while lowering its medium-term growth expectations and target price for the firm.

“We believe Vodafone has attractive potential to materially improve its structural position by acquiring cable assets, and realizing substantial potential synergies,” Goldman said in a review of the European Telecoms sector.

But the mood in the technology sector was cautious.

British chip designer ARM Holdings was the top FTSE 100 faller, down 1.1 percent after Apple, for which it is a supplier, missed Wall Street’s revenue forecast for the third straight quarter as iPhone sales came in below expectations.

“Negative read-across from a sentiment perspective to UK semis and Apple suppliers ... However, fundamentally we see limited read-across as the smartphone/tablet market continues to perform well,” Espirito Santo Investment Bank said in a note.

Technical analysis of the FTSE 100 index was mixed.

“Apart from the overbought readings on the momentum oscillators there is little in the current technical picture that is negative, so the outlook remains positive,” Bill McNamara, technical analyst at Charles Stanley, said.

“That said, I have identified 6,225 or so as a possible stumbling block for the FTSE and it is entirely conceivable that a short-term burst of profit-taking could see it drop by 2 percent quite suddenly,” McNamara added. (Editing by Catherine Evans)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below