Reuters: Hot Stocks: Britain's FTSE lags peers after Italy forms government

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Britain's FTSE lags peers after Italy forms government Apr 29th 2013, 08:43 Mon Apr 29, 2013 4:43am EDT * FTSE 100 up 0.1 percent, miners outperform * Fails to track gains in Italian assets * Aberdeen Asset Management surges as revenues up a quarter By Alistair Smout LONDON, April 29 (Reuters) - Britain's blue-chip index edged higher on Monday, underpinned by strength in miners but lagging European peers after Italy ended months of political deadlock by forming a government. At 0800 GMT, the FTSE 100 was up 5.38 points, or 0.1 percent, at 6,431.80, underperforming the Italian FTSE MIB , up 1.5 percent. The British stock market has little exposure to Italian companies, meaning it largely failed to track the gains in Italian assets that followed the swearing-in of Enrico Letta as prime minister at the weekend. "In the short term, the market is likely to give Italy the benefit of the doubt... but in the round I'm not sure that UK equities are going to underperform," Jeremy Batstone-Carr, analyst at Charles Stanley, said. The FTSE 100 has risen 9 percent this year and the MIB 1.8 percent. Miners were among the top sectoral gainers in Britain, up 0.8 percent, benefiting from increased appetite for growth-sensitive stocks, as well as upgrades from Nomura. BHP Billiton and Rio Tinto are Nomura's top picks in the sector. Both rose 0.8 percent. Antofagasta , ENRC and Anglo American also rose after upgrades from Nomura. Aberdeen was the top FTSE riser, up 8.5 percent after announcing a 25 percent jump in first-half revenues and increasing its dividend. "Recent trading updates have been pretty upbeat, so this shouldn't have come as a great surprise," Batstone-Carr said. "But asset managers have had a pretty good year, having diverged from the banks, which started very well and have begun to come off." The FTSE 100 is just 1.5 percent below five-year highs hit in March, and many other stock markets are also around multi-year or all-time highs due to expectations of further monetary easing and the unattractive yields being offered by bonds. The U.S. Federal Reserve and European Central Bank both meet this week, and a Reuters poll of 76 economists showed 43 expect the ECB to cut rates by 25 basis points. "The main focus this week will be on the Fed and ECB but as recent economic numbers have painted a fairly moribund picture of the global economy, investors will be predicting a dovish tone from policymakers," Mike McCudden, head of derivatives at stockbroker Interactive Investor, said in a trading note. (Reporting by Alistair Smout; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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