Reuters: Hot Stocks: Britain's FTSE rallies on Greek debt deal

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Britain's FTSE rallies on Greek debt deal Nov 27th 2012, 10:03 Tue Nov 27, 2012 5:03am EST * FTSE 100 up 0.5 percent, recovers Monday's decline * Banks rebound, led by RBS * Utilities weak; Severn Trent down after results * UK Q3 GDP unrevised, up 1.0 pct on the quarter By Jon Hopkins LONDON, Nov 27 (Reuters) - Britain's top shares pushed higher on Tuesday, recovering most of the previous session's decline, led by a rally in miners and banks as worries over Greece's debt situation subsided. International lenders agreed late on Monday on measures to cut Greek debt by 40 billion euros by 2020, reducing it to 124 percent of GDP and paving the way for Athens to receive its next instalment of bailout cash. "While a watered-down deal was more or less expected and therefore is already to a huge degree priced into share prices, at the same time this agreement/compromise does remove a substantial amount of uncertainty," said Markus Huber, head of German high net worth trading at ETX Capital. News that British third-quarter growth was, as expected, unrevised from an initial reading of up 1.0 percent for the quarter also helped to underpin the market gains. Miners led the blue-chip rebound after falls on Monday, supported by a firmer copper price. The metal rose to a near one-month high as the aid deal for Greece enhanced confidence about global demand for commodities sparked by signs of an economic revival in top consumer China. Banks also rallied after falls in the previous session, as investors' appetite for riskier stocks returned. Royal Bank of Scotland was the top blue-chip gainer, up 3.8 percent, having dropped a similar amount on Monday, with the part-state-owned lender's stock also boosted by an upgrade to "buy" by UBS. "We think the appointment of Mark Carney as the new governor of the Bank of England provides the opportunity for the UK regulatory environment to be recast with a more conciliatory tone," UBS said in a note. "This helps reduce the tail risk associated with investing in UK banks and we reduce our cautious stance on the sector by upgrading RBS to buy," the broker added Standard Chartered, however, missed out on the sector gains, slipping 0.1 percent having previously been perceived as the bank best protected from the euro zone debt crisis given its focus on Asia and emerging markets. Aberdeen Asset Management was also a faller among the financials, shedding 0.5 percent as Citigroup downgraded its rating to "neutral" following Monday's full-year results. "The reasons for liking Aberdeen remain intact ... But the capital return story is coming through slower than we had hoped, and we believe earnings expectations are fairly reflected in the share price," Citigroup said in a note. At 0940 GMT, the FTSE 100 index was up 30.23 points, or 0.5 percent, at 5,816.95. The UK blue-chip index closed 0.6 percent lower on Monday, pausing after having notched up an advance of 3.8 percent last week, the best so far for 2012. "While the nagging doubt of Greek sustainability may have been removed, note that the FTSE 100 has failed to break its Friday and 13-day prior highs. This begs the question of whether a breather after the recent up-move from 5,600 is still to materialise," Mike van Dulken, Head of Research at Accendo Markets said. Weakness in utilities was the main negative feature on the blue-chip board, with the sector's defensive qualities unwanted by investors happier to take on risk. Severn Trent shed 0.1 percent as the water company's in-line first-half results failed to excite investors. Severn Trent's H1 pre-tax profit rose 1.6 percent to 157.5 million pounds on revenues up 3.6 percent, helped by rising prices which countered lower usage during a wet summer. (Editing by Stephen Nisbet) Link this Share this Digg this Email Reprints

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