Reuters: Hot Stocks: Britain's FTSE 100 bounces on cyclical push

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Britain's FTSE 100 bounces on cyclical push Apr 19th 2013, 09:11 Fri Apr 19, 2013 5:11am EDT * FTSE 100 index gains 0.4 percent * Index faces crucial support at 6,215 * Vedanta up as court clears mining operations By Atul Prakash LONDON, April 19 (Reuters) - Britain's top share index advanced on Friday, recouping a small fraction of recent steep losses caused by growth concerns, with some investors looking for bargains in cyclical sectors like mining and banking. Miners, battered in recent sessions following a sharp sell-off in commodities, led the gains, with Anglo American rising 1.9 percent after posting slightly higher copper and iron ore production in the first quarter of 2013. The UK mining index rose 1.7 percent, but is still down about 5 percent this week. The FTSE 100 index rose 26.21 points, or 0.4 percent, to 6,269.70, by 0844 GMT, but was still heading for a weekly decline of about 2 percent. Other cyclical sectors also gained, with the banking index rising 1.4 percent, led by a 2.2 percent gain in HSBC. Analysts described Friday's rise as a technical bounce and said the market was likely to see choppy trading patterns in the coming weeks, with the holiday season approaching and lower volumes adding volatility to the market. "The index faces a crucial horizontal support at 6,215. If we have a daily close below this level, then a short term top formation will be completed and suggest a downside potential of about 300 points," Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said. The FTSE 100 has fallen nearly 4 percent in the past two weeks after some disappointing macroeconomic numbers from the United States and China, the world's top two economies, sparked growth concerns and triggered a deep sell-off in commodities. "The driver of the renewed risk appetite being a less gloomy outlook rather than outright optimism reinforces the fragility of the macro environment we are dealing with," Mike van Dulken, Head of Research at Accendo Markets, said in a note. Investors will keep an eye on a G20 meeting, which is set to debate specific targets for reigning in debt levels and the potential dangers from the latest round of aggressive easing of monetary policy. Any negative headline could ignite another round of sell-offs, analysts said. Focus will also be on the earnings season, with companies reporting mixed first quarter results so far. "The reporting season so far reveals good earnings performances but a much weaker top line experience," said Jeremy Batstone-Carr, head of private client research at Charles Stanley. He said the top line would have to start moving again to support his view that the first quarter marks the trough in the earnings downgrade process. Among individual movers, miner Vedanta Resources rose 5 percent to the top of FTSE 100 gainers' list after India's top court cleared its Karnataka mining project. British engineer IMI fell 2.7 percent as sentiment towards the stock soured after electrical engineering company Spectris said it expected revenue growth in 2013 to be below its previous forecast following a slow start to the year, pushing Spectris shares down as much as 13 percent. (Editing by Catherine Evans) Link this Share this Digg this Email Reprints

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