February 22, 2013 / 12:10 PM / 5 years ago

Britain's FTSE rebounds, led by miners

* FTSE 100 up 0.98 percent

* Thursday’s steep fall seen offering buying opportunity

* Implied volatility eases from 2-week highs

By Toni Vorobyova

LONDON, Feb 22 (Reuters) - Britain’s blue chip shares rebounded on Friday, with investors using the previous session’s sharp sell-off to dip their toes back into the market at cheaper levels and technical charts offering some support.

Miners , which have been among the few sectors to lose ground over the past month, were among the top performers, recovering some poise alongside higher metals prices.

The FTSE 100 was up 53.86 points or 0.9 percent at 6,345.40 points by 1152 GMT, moving back towards recent five-year highs after suffering its sharpest one-day fall since July on Thursday on concerns the U.S. Federal Reserve could end its stimulus programme sooner than expected -- thus removing a driver of the recent equity rally.

Despite Thursday’s set back, the UK blue chip index, is still up 7.5 percent since the start of the year in local currency terms, compared to a fall of 2 percent on the euro zone’s EuroSTOXX 50.

“We’ve had a bit of a bounce this morning ... The performance of the stock market has been quite astonishing since the beginning of the year and people are looking to buy on the dips,” said Andrew Feldhaus, investment manager at Redmayne-Bentley.

“There is still a school of thought ... that we will have a correction. But the market shows no signs of going down, there is still appetite out their for equities,” he added, recommending investors focus on stocks with sustainable dividends.

Appetite for risk assets was further bolstered by the jump in the keenly-watched Ifo German business morale index to a 10-month high in February, beating even the highest of economists’ forecasts and following hot on the heels of a strong ZEW index earlier this week.

Implied volatility on the FTSE 100 - a crude gauge of investor risk aversion - eased back from two-week highs.

Technical charts also offered some positivity, with the UK index bouncing up from the 38.2 percent Fibonacci retracement of the Feb. 7 to Feb. 20 rally and moving through the 22-day and 10-day moving averages.

“Any upward move today will look a lot like a positive reaction to technical support, thereby reinforcing the impression that the uptrend also remains firmly intact,” Bill McNamara, technical analyst at Charles Stanley, said in a note.

Among individual stocks, Melrose Industrials was the top riser, up 3.8 percent, with traders citing positive sentiment after news of a takeover bid in the sector.

Private equity firm KKR & Co has submitted an offer of $75 per share for Gardner Denver Inc, valuing the industrial machinery maker at close to $3.7 billion, sources told Reuters on Thursday. (Additional reporting by David Brett/editing by Chris Pizzey, London MPG Desk, +44 (0)207 542-4441)

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