Reuters: Hot Stocks: Britain's FTSE rises as weak data fuels talk of ECB cut

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Britain's FTSE rises as weak data fuels talk of ECB cut Apr 23rd 2013, 11:21 Tue Apr 23, 2013 7:21am EDT * FTSE 100 up 0.9 percent * Weak Europe data fuels talk of more stimulus * ARM results buoy hopes of good UK earnings season * FTSE 100 technical resistance seen around 6,339 By David Brett LONDON, April 23 (Reuters) - Britain's leading shares climbed on Tuesday boosted by an upbeat start to the UK company earnings season and by speculation of more accommodative monetary policy in Europe after weak economic data. The FTSE 100 was up 58.07 points, or 0.9 percent at 6,338.69. The index rallied as talk swirled of the potential for the European Central Bank to take measures to help boost the economy in the euro zone - the UK's largest trading partner - earlier than expected after data showed the private sector in euro economic powerhouse Germany shrank in April. Although recent polls suggest that the ECB will keep interest rates the same, the weak data fuelled speculation across asset classes with peripheral bond yields in countries such as Italy falling, equity markets rising and the euro weakening. "There has been some talk that the European Central Bank could potentially cut interest rates next week after the weak data," a London-based trader said. "So, for the time being, it looks like the investors are seeing bad news as good news." Britain's benchmark index was also lifted by a decent start to the earnings season for UK-listed companies. ARM Holdings jumped 7.6 percent pence after the chip designer beat first-quarter profit forecasts, with some traders seeing scope for the stock to push back up to its all-time high of more than 10 pounds. Associated British Foods rose 1.8 percent as it predicted its Primark discount clothing chain would remain Britain's fastest growing major retailer this year. UBS said the key attractions of equities continues to be the dividend yield and cash return. It said the flexibility of strong corporate balance sheets and relatively low payout ratios meant European companies would be able to absorb weaker earnings per share growth. Among stock highlighted by UBS where a potential positive surprise might be seen included Aberdeen Asset Management , which was up 3.4 percent on Tuesday. Broader gains on the FTSE 100, however, were capped by continued weakness among the miners and industrial metals sectors The latest data from China, which showed activity in it's vast factory sector slowed back to near-stagnation in April, fanned fears of slowing demand from the region. The charts outlook for both the UK mining and industrial sectors -- the worst-performing so far this year -- looked negative too, with the 50-day moving average crossing below the 200-day line this week in a pattern known as the 'death cross'. The pattern usually signals further losses on a six- month horizon. (Reporting by David Brett Editing by Jeremy Gaunt.) Link this Share this Digg this Email Reprints

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