February 8, 2013 / 9:01 AM / in 5 years

Britain's FTSE rebounds thanks to strong China data

* FTSE 100 up 0.7 pct, recovering after recent falls
    * Chinese data boosts sentiment
    * Implied FTSE volatility retreats from 1-month high

    By Toni Vorobyova
    LONDON, Feb 8 (Reuters) - Britain's FTSE 100 
rebounded on Friday, bolstered by heavyweight miners and energy
stocks after forecast-beating Chinese trade data fanned
confidence in the global economic recovery.
    China's exports and imports surged more than expected in
January, pointing both to stronger domestic demand and to a
recovery in the world economy as a whole. 
    The data prompted investors to take advantage of this week's
equities retreat to snap up miners - for whom China is a key
market - at cheaper levels. The sector added 0.7 percent
, led by Chilean copper miner Antofagasta.
    The broader improvement in sentiment also boosted banks
 after steep falls earlier in the week.
    "Banks and miners are the core interest markets when things
are ticking better ... It's largely on the back of the Chinese
data and the Asian rally overnight," said Matt Basi, head sales
trader at CMC Markets.
    "People took some risk off the table through shorts
yesterday and there is a bit of short covering going on."
    The FTSE 100 was up 38.11 points, or 0.6 percent, at
6,266.53 points by 0845 GMT, recouping some of the previous
session's 1.1 percent drop.
    "The 6,300 becomes a key level in the FTSE again. That has
been a bit of a technical buffer recently, both as support and
as resistance, so if we close above that it would be quite a
positive finish to the week," Basi said.
    However, the gains looked unlikely to prevent the UK index
from posting its first weekly loss of 2013, following a rally to
a 4-1/2 year peak of 6,354.46 last week.
    "The FTSE 100 index is consolidating within a strong
up-trend," technical analysts at Westhouse said in a note,
highlighting support at 6,175 points - the trendline from the
start of the rally in mid-November.
    Vodafone offered the biggest single stock support to the
FTSE 100, up 1.9 percent after Bank of America Merrill
Lynch upgraded it to 'buy' seeing several positive outcomes for
its 45 percent holding in Verizon Wireless and noting the
shares' recent underperformance versus the broad UK index.
    In a sign of improved investor confidence, the implied
volatility on the FTSE 100 fell 7 percent, retreating from
Thursday's one-month high.
    There was also positive news from Europe, with EU leaders
agreeing the framework for a new long-term budget on Friday
after 15 hours of intense negotiations. 

 (Reporting By Toni Vorobyova; Editing by John Stonestreet)

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