Reuters logo
FTSE climbs on busy results day, WPP firms
March 1, 2013 / 9:36 AM / 5 years ago

FTSE climbs on busy results day, WPP firms

* FTSE 100 up 0.2 percent

* WPP firms, growth beats forecast

* Lloyds big faller after results

By Tricia Wright

LONDON, March 1 (Reuters) - Britain’s top shares crept higher on Friday as investors waded through another flurry of corporate earnings reports, with WPP gaining after it delivered forecast-beating growth.

The FTSE 100 was up 11.03 points, or 0.2 percent, at 6,371.84 by 0921 GMT, after it rose 0.6 percent on Thursday.

“Today’s focus is on whether corporates are continuing to exceed expectations ... it’s more micro than macro,” said Richard Hunter, head of equities at Hargreaves Lansdown.

WPP, the world’s largest advertising firm, and often seen as a barometer for the state of the economy, recovered from third-quarter weakness to post annual growth in organic revenue ahead of expectations, sending its shares up 1 percent.

Referring to the figures as “decent”, Investec Securities hiked its target price for WPP to 1,150 pence from 1,060 pence, while repeating its “buy” rating on the stock.

Anglo-South African insurer Old Mutual, meanwhile, firmed 1.7 percent after it unveiled a higher-than-expected profit.

“In our opinion the company stands to gain from further financial focus and discipline and this will continue to improve returns for shareholders,” Oriel Securities said in a note, keeping a “buy” recommendation on the company.

The earnings season has proved mixed so far. Of the 60 percent of STOXX Europe 600 shares to have posted results, 60 percent have beaten or met forecasts, according to Thomson Reuters Starmine data.

Lloyds Banking Group suffered a 3.5 percent fall after its results.

The state-backed bank said it made a loss last year after setting aside another 1.9 billion pounds ($2.9 billion) to compensate customers mis-sold insurance and other products.

Some analysts were relatively unfazed by Lloyds’s share price falls on Friday, which they said should be seen in the context of a more than 10 percent gain this year in the run-up to the numbers.

“Some natural profit taking is evident,” said Atif Latif, director of trading at Guardian Stockbrokers.

“The market is cautious on the increase again of PPI provisions ... but the investment case for LLOY, even with all its legacy issues, remains compelling given the case for restructuring and improving the balance sheet,” he said.

The weakness was reflected in sector peers, having enjoyed gains in the previous session on assurances over continued monetary support from central banks.

RBS, which missed out on Thursday’s rally after reporting a pretax loss last year of 5.2 billion pounds, came under renewed pressure.

Charles Stanley technical analyst Bill McNamara highlighted that the previous session’s hefty 6.6 percent drop, in brisk volume, took RBS through its 50-day moving average for the first time since August as well as the uptrend that has been defining the rally since last summer.

“Taken together - and given the extent to which that moving average had been providing support - this does not look good at all,” he said in a note.

McNamara said a 38.2 percent retracement of the seven-month uptrend gives a downside target of around 301 pence, and while that is significantly lower than current levels, “the deterioration in the technical picture suggests that it is not an unrealistic expectation”.

RBS shares were trading down 2.2 percent at 316.9 pence.

Technical charts are starting to look bearish for the FTSE 100, which is trading near five-year highs, according to some analysts. James Hyerczyk, analyst at Autochartist, said that recent lower bottoms at 6,278 and 6,258 “suggest the market could be getting ready to roll over to the downside”.

“If the FTSE does begin to roll over then expectations are for a near-term break into a retracement zone at 6,142.92 to 6,079.31,” he said in a note. (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