Reuters: Hot Stocks: Britain's FTSE pauses near 9-month highs

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Britain's FTSE pauses near 9-month highs Dec 20th 2012, 11:50 Thu Dec 20, 2012 6:50am EST * FTSE 100 up 0.1 percent, near 9-month highs * Testing chart resistance at 2012 closing high * Expected to test key mark of 6,000 points * Weir gains after acquisition By Toni Vorobyova LONDON, Dec 20 (Reuters) - Britain's top share index steadied around nine-month highs on Thursday, pausing after recent gains before a widely-expected attempt to test the psychologically key 6,000 points mark into the year-end. Investors were discouraged from pushing the market too much higher by the lack of progress by U.S. politicians on a deal to avoid a 'fiscal cliff' of planned tax hikes and spending cuts that threatens the health of the world's biggest economy in 2013. But many market players expect a compromise will be found which, combined with traditional seasonal inflows from investors taking the final chance to boost annual profits, could give the stock market a fresh leg-up in coming sessions. The FTSE 100, which is up 1.7 percent so far this month, has posted gains for the past nine Decembers. "The odds are strong that we will reach 6,000 ... This is probably a 'buy the rumour, sell the fact' rally, all based on speculation that the U.S. will reach a fiscal cliff compromise," said James Hyerczyk, analyst at Autochartist. "The slow grind suggests that the rally may end at this objective with a fast and furious surge. Typically, this type of rally ends with a higher high and a lower close." The UK blue chip index was up 4.36 points, or 0.1 percent, at 5,965.95 by 1121 GMT, just short of the 5,977.82 nine-month intraday high set the previous session. En route to 6,000, a level it last reached in July 2011, the FTSE faces resistance around the 2012 closing high of 5,965.58 - currently being tested - and this year's intraday peak of 5,989.07, both set in March. Low volumes added to the jittery trading, taking some momentum out of the rally. Average daily volumes traded on the FTSE so far this month are down by a third compared to the same period last year, according to Reuters calculations. Engineer Weir Group led FTSE gainers, up 3.6 percent as investors cheered its acquisition of U.S. oil equipment firm Mathena as it looks to increase exposure to the rapidly growing shale oil and gas markets. "We expect this deal to be 4 percent earnings-enhancing in 2013," analysts at Numis said in a note, reiterating a 'buy' rating on the stock with a target price of 2,300 pence - around 23 percent above current levels. Domestic-focused companies and retailers edged lower, with a weaker than expected reading on UK November retail sales pointing to a likely fourth quarter contraction in the economy. (Reporting By Toni Vorobyova; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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