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UPDATE 1-Britain's FTSE dips, set to break 4-week winning streak
July 26, 2013 / 10:41 AM / 4 years ago

UPDATE 1-Britain's FTSE dips, set to break 4-week winning streak

(Recasts, updates prices, adds new quotes)

* FTSE 100 down 0.2 percent

* Decent earnings provide support as index hits resistance

* Rolls Royce top faller after Deutsche downgrade

By Alistair Smout

LONDON, July 26 (Reuters) - Britain’s FTSE 100 looked set for its first weekly fall in more than a month on Friday, faltering at resistance levels but receiving support from a spate of good earnings reports.

While Pearson and Anglo American gained 6.9 percent and 1.5 percent after confirming or exceeding predictions for full-year outlooks, the FTSE stalled around the 6,600 level, which it has struggled to sustain a break through in recent weeks.

Of the FTSE 100 companies who had reported second quarter earnings by Thursday’s close, 60 percent beat or met expectations, compared to 50 percent of their euro zone peers in the EuroSTOXX 50, according to Thomson Reuters StarMine.

“Decent earnings have been factored in to a certain degree, and the FTSE 100 is finding little in the way of momentum to the upside,” Manoj Ladwa, head of trading at TJM Partners, said.

“We’ve had a good run, bouncing from 6,000 to 6,600, and it’s running out of steam now. I can’t see a huge amount of upside from equities in the near term.”

The British blue-chip index was down 12.68 points, or 0.2 percent at 6,575.27 points by 1029 GMT.

The FTSE was still on track to break a four-week long run of weekly gains after repeatedly failing to break through tough technical resistance around seven-week highs in the 6,660 area.

David Furcajg, technical analyst at 3rdwaveconsult, said an upward trend which started in 2011 would remain in place for as long as the 200-day moving average kept rising, but that we could see further near term falls.

“Over the short-run ... a consolidation towards 6,374 is the most likely scenario,” he said.

Top faller was Rolls Royce, down 3.6 percent to retrace most of Thursday’s post-earnings surge. While the company announced a 34 percent rise in profit, analysts at Deutsche Bank saw the company’s cost control as disappointing, and downgraded the stock to “sell” from “hold”.

Adding to the downside, BSkyB fell 1.4 percent after the broadcaster announced a share buy-back size at the lower end of expectations. It forecast the consumer environment will remain challenging and announced new investments which could dent next year’s profit.

Additional reporting by Toni Vorobyova; Editing by Catherine Evans

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