August 22, 2014 / 8:26 AM / 3 years ago

FTSE steadies near 3-week high, focus on Yellen

* FTSE 100 index flat in morning trading
    * Index touches 3-week high, heads for 2nd positive week
    * Investors cautious before Fed Chair Yellen's speech

    By Atul Prakash
    LONDON, Aug 22 (Reuters) - Britain's top share index
steadied on Friday, with investors trading cautiously ahead of a
speech by U.S. Federal Reserve Chair Janet Yellen that could
provide hints about the timing of a U.S. rate hike.
    The blue-chip FTSE 100 was unchanged at 6,778.93
points by 0811 GMT after touching a three-week high.
    The UK market will be closed on Monday for a public holiday.
    "Some hesitation ahead a of a long weekend is pretty
understandable," Alastair McCaig, analyst at IG, said. "The
market is going to tread water until Yellen's speech as this
week's data looks to have given the United States an upper hand
in the race between the UK and the U.S. to raise rates."
    The U.S. S&P 500 ended at a record high on Thursday
after positive data including existing home sales jumping to a
10-month high and initial jobless claims dropping sharply.
    Analysts said markets were broadly expecting Yellen to
remain fairly dovish in Friday's speech to the annual gathering
of central bankers in Jackson Hole, Wyoming. Any shift away from
that stance could hurt market sentiment.
    "It will be crucial if she has changed her opinion of the
overall health of the labour markets, which so far she has
described as still sluggish despite the overall jobless rate
(having) fallen much quicker than originally anticipated,"
Markus Huber, senior analyst at Peregrine & Black, said.
    "Any hints that the labour market is more balanced and
healthier than earlier this year might lead to a reassessment by
analysts concerning the likely timing of a first rate rise." 
    The FTSE 100 index has gained 1.3 percent so far this week
and is for its second positive week in a row. But it is up just
0.4 percent so far this year.
    Among individual movers, London Stock Exchange Group 
fell 0.8 percent after saying it would raise 938 million pounds
($1.6 billion) to part-fund the acquisition of Frank Russell

 (Reporting by Atul Prakash, editing by John Stonestreet)

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