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FTSE rises for third straight day, bolstered by miners
February 7, 2014 / 4:20 PM / in 4 years

FTSE rises for third straight day, bolstered by miners

* FTSE up 0.1 percent

* Miners outperform, get fillip from steelmakers

* Tate bolstered by double JPMorgan upgrade

* Shire weakens on trial failures

By Tricia Wright

LONDON, Feb 7 (Reuters) - Britain’s top shares rose for a third straight session on Friday, led up by miners which were helped by an upbeat outlook from steelmaker ArcelorMittal .

UK equities sold off in early afternoon trade after a disappointing U.S. jobs report, only to stage a recovery as traders expressed confidence that shares would continue to benefit from a gradual pick-up in the global economy.

Data showed that U.S. employers hired far fewer workers than expected in January, with non-farm payrolls up by 113,000, against consensus of 185,000, although the unemployment rate hit a five-year low of 6.6 percent.

The FTSE 100 was up 8.59 points, or 0.1 percent, at 6,566.87 by 1550 GMT, recovering its poise after dropping to a session low of 6,540.81 just after the data was released.

“There are algos that sell immediately after the payrolls number if it’s weaker than expected but then people look at the overall picture, which is not that bad, and buy back on the dips,” Mike Reuter, a broker at Tradition, said.

Supporting a view that the figures were not as bad as they might have initially seemed, Dallas Federal Reserve Bank President Richard Fisher told CNBC that weather was the likely culprit behind weak jobs numbers in both December and January.

Cyclical miners advanced, supported by reports from steelmakers ArcelorMittal and SSAB.

The UK mining sector, headed for its second straight week of gains, is up nearly 2 percent for the year after falling 16 percent in 2013.

Sweetener maker Tate & Lyle advanced 1.8 percent, among the top FTSE 100 risers. Traders cited a double upgrade by JPMorgan, to “overweight” from “underweight”, as the catalyst for the move.

Shire fell 0.8 percent in brisk trade after Vyvanse, a top-selling medicine for hyperactivity, failed in two late-stage clinical trials to successfully treat adults with major depressive disorders.

Some traders see scope for a further near-term sell-off in Shire, up around 9 percent in 2014 against a drop of about 3 percent on broader the FTSE 100, with the recent gains having been driven partly by speculation of a takeover attempt on the pharmaceuticals group.

“I think it should go down more; it’s obviously a blow to the company ... I think you’ll see a quite negative pull-back to 28 quid,” said Joe Rundle, head of trading at ETX Capital.

“If there’s a big sell-off in the stock (to 28 pounds) bid speculation will come back ... into play in a more serious manner,” he said. Such a drop would take the shares some 10 percent below the current 3,113 pence level.

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