Reuters: Hot Stocks: Britain's FTSE 100 recovers, led by miners

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Britain's FTSE 100 recovers, led by miners Apr 19th 2013, 11:03 Fri Apr 19, 2013 7:03am EDT * FTSE 100 index gains 0.7 percent * Investors see value in miners after sell-off * Barclays Stockbrokers flows show buying into weakness By Toni Vorobyova LONDON, April 19 (Reuters) - Britain's top share index edged higher on Friday, with some investors looking for bargains among mining stocks after the recent steep sell off on global growth concerns. A decent production update from Anglo American also helped sentiment on the mining sector, as did a pick up in gold and copper prices. The FTSE 350 mining index rose 2.2 percent. The industrial metals index added 4.1 percent, although it is still down 21 percent since the start of April - on track for its worst month in nearly a year. The blue chip FTSE 100 index added 41.37 points, or 0.7 percent to 6,285.04 points, looking to post its first rise in six sessions but still around 3.8 percent below a five-year peak set last month. "I can't get terribly carried away at the moment by an enormous amount of upside in the market from here in the short-term, but there will be opportunities," said Edward Bland, head of research at Duncan Lawrie Private Bank, highlighting miner BNP Billiton as a potentially attractive buy. "Provided a company is underpinned by a premium secure yield - and that applies to Billiton which has a prospective yield of 4 percent - you would do very well if you plumb the bottom." Shares in BHP were up 1.7 percent, recovering from seven-month lows. The company is forecast to have a dividend yield of 4.6 percent next year, according to Thomson Reuters StarMine Smart Estimates - the highest among all the FTSE 100 miners - and yet it trades on just 10.5 times its current earnings, broadly in line with the sector average. Implied volatility on the FTSE - a crude measure of investor risk aversion based on the prices people are willing to pay for options - fell 12 percent. Banks and energy companies - two more laggards in recent weeks - also did well, underlying investors' penchant for using sell offs to enter the market. "We noticed a discernible shift towards purchases last week when the market was low, and this trend has persisted," said Chris Stevenson at Barclays Stockbrokers. "Since 5 April, on average 58 percent of client trades have been purchases - against a first quarter average of 53 percent - and looking at this week in particular, the ratio has moved up slightly to 59 percent, as clients look to invest into market weakness." However, a note of caution remained in the market, with activity relatively subdued and volumes on the FTSE at just 40 percent of the 90-day daily average by mid-session. One reason for caution is the current earnings season, where so far in Europe, 39 percent of companies which have already reported first quarter results have missed expectations, according to Thomson Reuters StarMine. British mid-cap engineer Spectris on Friday posted an 8 percent drop in first quarter sales and said it expects full year revenue to undershoot its previous forecast. Shares in Spectris dropped 12.4 percent after the results, which also weighed heavily on blue chip rival IMI, whose stock led the FTSE 100 fallers with a 1.3 percent drop. (Editing by Catherine Evans) Link this Share this Digg this Email Reprints

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