Reuters: Hot Stocks: Strong Unilever earnings fuel gains in UK shares

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Strong Unilever earnings fuel gains in UK shares Jan 23rd 2013, 09:29 Wed Jan 23, 2013 4:29am EST * FTSE 100 index adds 0.1 percent, stalls at 6,200 level * Unilever hits all-time peak after full-year results * Takeover chatter fuels gain in United Utilities * TUI Travel drops as German parent dashes takeover hopes By Jon Hopkins LONDON, Jan 23 (Reuters) - Strong earnings from household goods firm Unilever drove gains in Britain's top share index on Wednesday, with the numbers boding well for the nascent full-year results season. Unilever shares jumped to a record high, alone providing almost 3 points of the FTSE 100 index's gains with a 2.3 percent rise in strong early volume of almost half its 90-day daily average in the first hour of trade. The global consumer goods company earlier reported underlying sales growth of 6.9 percent or 2012, beating forecasts of 6.5 percent, propelled by double-digit growth in emerging markets. "Unilever looks to have moved from a recovery play to a core portfolio holding. Exposure to the Emerging Markets remains enticing, cashflow and the resulting dividend payment still attractive, while its defensive attributes continue to appeal," Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers said. At 0916 GMT, the FTSE 100 index was up 7.85 points, or 0.1 percent, at 6,187.02 points, having reached a 2013 peak at 6,199.59 in early deals. The blue chip index closed flat on Tuesday, weighed by falls in financials and mining stocks. "Investors have banished thoughts of an imminent correction and are back out in force this morning thanks to more positive results," Mike McCudden, Head of Derivatives at stockbroker Interactive Investor said. "Furthermore, with strong signals that we will see a bill from the U.S. House of Representatives granting a four month extension to the debt deadline, investors are happy to ride the current wave of confidence for a while longer." Republican leaders in the House signalled on Wednesday that they would aim to pass a bill to extend the U.S. debt limit. The White House said this would remove uncertainty about the issue. The Standard & Poor's 500 index rose to a fresh five-year closing high on Wall Street on Tuesday on the debt ceiling news, also supported by some positive earnings reports. Back in London, BHP Billiton also lent strength to the blue chips, up 1.1 percent and providing around 2 points of the FTSE's gains. The global miner boosted its iron ore output by 3 percent in the December quarter, as it races to supply more of the raw material to Chinese steelmakers despite signs of a softening market. BHP's advance lifted the heavyweight mining sector , while energy stocks also found gains benefitting from a firmer crude price as well as some underlying takeover talks. BG Group extended Tuesday's gains, up 0.3 percent amid rehashed speculation that BP was running the slide-rule over the company, according to a Daily Mail report. The Independent newspaper also picked up on the renewed bid rumours and said BP, Royal Dutch Shell and Exxon Mobil have all been thrown up as possible bargain hunters for BG, together with buyers who may emerge from China. BP was up 0.3 percent, and Royal Dutch shares were flat. Among other takeover chatter, United Utilities added 1.7 percent, the most traded FTSE 100 stock reaching its 90-day daily volume average in the first-hour of trade, on speculation that a consortium of infrastructure funds were lining up a bid of between 8 and 10 billion pounds for the multi-utility, according to the Daily Telegraph market report. The Financial Times however, pointed out that non-executive director Sara Weller bought shares in United Utilities on Tuesday, suggesting there is no real foundation to recent bid gossip. And a touch of takeover hopes knocked TUI Travel shares 4.8percent lower, with its parent, German travel and ourism group TUI AG saying it has no intention of making an offer for the majority-owned British unit. Among other FTSE 100 fallers, ex-dividend factors clipped 1.97 points off the index, with contractor caterer Compass Group and utility Scottish & Southern Energy both trading without entitlement to their latest payouts. (Reporting by Jon Hopkins) Link this Share this Digg this Email Reprints

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