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Britain's FTSE steadies, propped up by Prudential
December 10, 2013 / 8:50 AM / 4 years ago

Britain's FTSE steadies, propped up by Prudential

* FTSE 100 flat in morning trade

* Prudential offers biggest boost after Asia plans

* Technical support cluster seen capping any weakness-Informa

By Toni Vorobyova

LONDON, Dec 10 (Reuters) - Britain’s top share index steadied on Tuesday, propped up by a cluster of technical support levels and a string of upbeat corporate reports from the likes of Tui Travel and Prudential.

Broad macro concerns, however, kept a lid on the market’s gains, with several Federal Reserve members overnight backing the scaling back of equity-friendly stimulus as soon as next week’s meeting.

St. Louis Federal Reserve Bank President James Bullard, who is sometimes seen as a bellwether for U.S. monetary policy , unexpectedly voiced support for a “small taper”. Two of his colleagues, meanwhile, said the risks of continued super-easy monetary policy exceed the benefits.

“People are being a bit more cautious, no one is really taking big positions. After a bit of a bounce on Friday we have come to a point where people are very reluctant to sell out given the historical Santa (Christmas) rally, but they are also reluctant to buy given the Fed meeting next week,” said Jonathan Roy, sales trader at London Stone Securities.

“I think they (the Fed) are preparing the markets for the situation when they do taper, but whether it happens in December or not remains to be seen.”

The FTSE 100 was steady at 6,561.48 points by 0835 GMT, having started the session slightly lower.

On the upside, Prudential, up 0.9 percent, offered the biggest points boost to the FTSE 100 after the British based life group has set new growth objectives driven by its Asian business.

“We applaud these targets, which, on first viewing, appear pretty stretching and aggressive. To us, they are a sign of the drive and determination of the group’s management to deliver real value for shareholders...again,” analysts at Shore Capital said in a note.

Investors also welcomed forecast-beating results from the tour operator TUI Travel, and news that Lloyds Banking Group has raised 680 million pounds ($1.11 billion) from the sale of its remaining 21 percent stake in wealth manager St James’s Place.

Technical charts, meanwhile, were another source of support.

“There are a number of significant support levels just below the market which should prevent further weakness and allow bulls to gain traction,” said Ed Blake, technical analyst at Informa Global Markets, highlighting a cluster of trendlines and Fibonacci numbers from 6,485.00 to 6,435.61 points.

“In terms of resistance, the first significant level is the Nov. 13 former low at 6613.98 points.”

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