August 23, 2013 / 11:07 AM / in 4 years

FTSE inches higher, led by chemical maker Croda

* FTSE 100 up 0.2 percent

* Signs of pick-up in global growth bolster sentiment

* Croda leads, Deutsche Bank upgrades to “buy”

By Tricia Wright

LONDON, Aug 23 (Reuters) - Britain’s blue chip shares inched up on Friday against a backdrop of economic recovery taking hold, led by specialty chemical maker Croda International on a rating hike from Deutsche Bank.

Croda International, up 4.1 percent, was the biggest gainer by some margin, with traders citing Deutsche Bank’s upgrade of the stock to “buy” from “hold” on the view that top-line growth is set to pick up.

“Top-line growth has slowed over the past year ... We view this slowdown as cyclical rather than structural and expect sales growth to accelerate driven by a resumption of growth in Crop Care and Personal Care,” the bank said in a note.

By 1049 GMT, the FTSE 100 was up 11.85 points, or 0.2 percent, at 6,458.72 points, having risen 0.9 percent on Thursday - its biggest one-day gain since the start of the month.

Markets have become increasingly jittery in recent weeks on the prospect that the U.S. Federal Reserve will start reeling in its stimulus programme, which has lifted global equities.

But that was offset on Friday by fresh signs of a pick-up in the pace of economic growth, with data showing the UK economy had grown more than first thought in the second quarter - coming on the heels of a batch of upbeat macroeconomic data from around the world on Thursday. Germany also confirmed solid second-quarter growth.

“Investors should be able to be relaxed about risk appetite in the current environment with the improving conditions that we have been seeing, regardless of whether the Federal Reserve starts to taper its stimulus package as expected in September,” Henk Potts, market strategist at Barclays, said.

Technical analysts, however, sounded a note of caution on the UK benchmark, which has fallen around 2.4 percent since the beginning of the month.

GFT Markets analyst Fawad Razaqzada said that before he can conclude that the long-term bullish trend has resumed, the index must first break several resistance levels - at 6,500, 6,550 and 6,640. (Editing by Susan Fenton)

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