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UK's FTSE perked up by Petrofac
August 27, 2014 / 4:06 PM / 3 years ago

UK's FTSE perked up by Petrofac

* FTSE 100 closes up 0.1 pct at 6,830.66 points

* Petrofac rises on positive broker comments

* Sainsbury and Tesco fall on weak sales data

By Sudip Kar-Gupta

LONDON, Aug 27 (Reuters) - Britain’s top equity index climbed to its highest closing level in nearly two months on Wednesday, with oil and gas services company Petrofac buoyed by positive broker comments.

However, supermarket stocks such as J Sainsbury Plc and Tesco underperformed after weak sales data.

The blue-chip FTSE 100 index ended up by 0.1 percent, or 7.90 points, at 6,830.66 points - marking its highest closing level since early July.

“The market looks good, the market looks robust. The weight of money seems to be coming in,” Beaufort Securities sales trader Basil Petrides said.

Petrofac rose 2.3 percent, making it the best-performing FTSE 100 stock in percentage terms.

Brokerage Investec kept a “buy” rating on the stock, while S&P Capital raised its rating on Petrofac to “strong buy” from “buy”, a day after Petrofac reassured investors by sticking to its full-year earnings forecast in spite of suffering a fall in first-half profits.

However, Sainsbury fell 2.6 percent while rival Tesco retreated 1.1 percent after data from Kantar Worldpanel showed yet more weak sales for the country’s top supermarket retailers.

Kantar Worldpanel said UK grocery market sales rose 0.8 percent in the 12 weeks to Aug. 17 - the slowest rate of growth in a decade for a 12-week period - as the top companies face competition from low-cost rivals such as Aldi and Lidl.

“The market reports on the monthly Kantar data reveals a British grocery market that remains firmly in the doldrums,” Shore Capital analyst Clive Black said.

The FTSE has risen some 4.6 percent over the past 2-1/2 weeks, boosted by speculation of new stimulus measures from the European Central Bank to boost the euro zone’s struggling economy.

The index hit a peak this year at 6,894.88 points in mid-May, which marked its highest level since December 1999.

JNF Capital trader Rick Jones said any near-term moves higher could hit a barrier around the 6,840-6,850 point level, but added he expected the FTSE 100 to test record levels around the 7,000 point mark by the end of 2014.

“We expect the market to test all-time highs later this year,” he said. (Additional reporting by Francesco Canepa and Emma Thomasson; Editing by Alison Williams)

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