Reuters: Hot Stocks: Britain's FTSE eases, still posts best week in 3 months

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Britain's FTSE eases, still posts best week in 3 months Apr 12th 2013, 16:04 Fri Apr 12, 2013 12:04pm EDT * FTSE 100 down 0.5 percent on day * Technical charts show room for more gains * HSBC upgrades British equities to 'overweight' By Toni Vorobyova LONDON, April 12 (Reuters) - Britain's FTSE 100 edged lower on Friday, with concerns about a fresh flare up of the euro zone crisis and weak U.S. data prompting investors to take some profits on the index's best week in three months. News that Cyprus is considering asking the EU to front load the payment of structural funds reignited concerns about the cost of bailing out euro zone states. Appetite for risk assets was further hurt by unexpected falls in U.S. retail sales and consumer sentiment, which fanned doubts about the strength of the recovery in the economy which accounts for around a quarter of revenues for British blue chips. With FTSE 100 investors already sitting on 2.7 percent gains for the first four days of the week, that proved a sufficient catalyst for profit-taking before the weekend. The blue chip index closed down 31.75 points, or 0.5 percent, at 6,384.39 points, but found a floor to the losses around the 50-day moving average and still managed to post its best weekly gain since early January of 2.2 percent. "Natural market mechanics would suggest a bit of profit taking after such a strong run," said Ed Woolfitt, trader at Galvan. "Data has been a bit disappointing - retail sales from America a touch negative, and the consumer sentiment, but bizarrely this market doesn't want to go down much." He added that he would be looking to take advantage of the dip to buy into the market at cheaper levels. "We've seen a lot of quality blue chip companies that have been caught up in this, that's where we've been aiming. We are not looking for miners because they are simply too vulnerable." Metals and miners - some of the strongest performers this week thanks to strong economic data from metal-hungry China - took 10.2 points off the FTSE 100 on Friday. Randgold Resources dropped 4.6 percent and Eurasian 3 percent. Banks were the next biggest drag, suffering from their direct exposure to the euro crisis through sovereign bond holdings. Charts, however, showed the technical outlook for the FTSE 100 as a whole remained relatively bright. "Only below 6,326.54 questions the positive view and risks a deeper correction towards 6,290.56," said Chris Wright, technical analyst at Informa Global Markets "While near-term support ... holds, dips are viewed as corrective and bulls favoured to resume broader strength for 6,501.78, followed by the 6,533.99 year-to-date high." From a fundamental point of view, too, analysts saw reasons to buy the British stock market, with HSBC upgrading the country to 'overweight' from 'underweight'. "The short-term drivers are positive for the UK, driven primarily by earnings momentum. This has rebounded sharply and it is now the strongest in Europe," HSBC analysts wrote. "This indicates a higher degree of confidence in the 2013 earnings outlook. We forecast 9 percent earnings per share growth, an upside surprise versus the consensus estimate of 5 percent." (Editing by Ruth Pitchford) Link this Share this Digg this Email Reprints

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