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Britain's FTSE gains on back of strong Chinese demand
September 3, 2013 / 8:36 AM / 4 years ago

Britain's FTSE gains on back of strong Chinese demand

* FTSE 100 up 0.1 percent

* Miners and banks higher after Chinese PMIs

* easyJet a top FTSE riser after MS upgrade, delay over Syria

* Vodafone falls on details of joint venture sale

By Alistair Smout

LONDON, Sept 3 (Reuters) - British shares edged higher on Tuesday, boosted by Chinese data pointing to better global growth, but gains were limited by falls in Vodafone as details of the sale of Verizon Wireless disappointed some analysts.

Growth sensitive sectors including miners and Asia-exposed banks were among the top gainers, after China’s services sector grew steadily in August as domestic demand picked up, official data showed on Tuesday.

The FTSE 100 rose 0.1 percent, up 5.53 points at 6,511.72 by 0800 GMT, taking gains for the week to 1.5 percent after a 1.2 percent drop last week on concerns about instability in the Middle East.

Traders were still looking to the situation in Syria, where U.S. military action is on hold, and warned that gains may be muted until the picture became clearer.

“We’ve got a brightening growth picture, and clearly people were too short into the weekened, so we’re getting squeezed higher. But while the Syria concerns are on the side, there can’t be a vote in Congress on it until next week, so it could be a bit choppy until then,” a London-based sales trader said.

Low-cost airline easyJet, which had suffered with the higher oil price sparked by concerns over stability in the Middle East, was the top gainer, up 1.8 percent, benefiting too from a target price upgrade from Morgan Stanley.

Having fallen 16.2 percent from early to late August, the stock is now up 8.2 percent in the last four days.

On the downside, Vodafone fell 1.7 percent, taking 6.8 points off the FTSE 100 index, after the British telecom firm said the deal would allow it to return 71 percent of the net proceeds - or $84 billion including all of the stock - to shareholders.

The division of the return to shareholders between shares and cash is capped, meaning that “shareholders are only compensated for a small amount of potential Verizon weakness yet don’t benefit from any strength until VZ has rallied 7.6 percent,” Simon Maughan, strategist at Olivetree, said in a trading note.

“This means VOD shareholders lose out on a meaningful amount of VZ potential upside but wear most of the potential downside, we model this as costing VOD shareholders some 3.3p,” he said.

Vodafone traded 3.5 pence lower, although the stock has still gained 10.2 percent since details of the deal started emerging last week. (Reporting by Alistair Smout; editing by Stephen Nisbet) For related prices, Reuters users may click on - * UK stock report FTSE index: techMARK 100 index: FTSE futures: <0#FFI:> Gilt futures: <0#FLG:> Smallcap index: FTSE 250 index: FTSE 350 index: Market digest: Top 10 by vol: Top price gainers: Top % gainers: Top price losers: Top % losers: * For related news, click on - * UK hot stocks: [HOT and GB] Wall Street: Gilts report: Euro bond report Pan European stock report: Tokyo stocks: HK stocks: Sterling report: Dollar report: * For company prices, click on - * Company directory: By sector: * For pan-European market data, click on - * European Equities speed guide................ FTSE Eurotop 300 index........................... DJ STOXX index................................... Top 10 STOXX sectors........................ Top 10 EUROSTOXX sectors................... Top 10 Eurotop 300 sectors.................. Top 25 European pct gainers.................... Top 25 European pct losers.....................

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