Reuters: Hot Stocks: CORRECTED-Britain's FTSE hits new 3-week highs, led by miners

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CORRECTED-Britain's FTSE hits new 3-week highs, led by miners Apr 25th 2013, 08:03 Thu Apr 25, 2013 4:03am EDT (Corrects time of GDP data release) * FTSE 100 up 0.2 pct in 3rd consecutive day of gains * Miners, one of the cheapest sectors, lead the risers * Weak UK GDP could boost stimulus expectations By Toni Vorobyova LONDON, April 25 (Reuters) - Britain's top share index edged higher on Thursday, setting new three-week highs, but gains were likely to be modest before data which could show the UK economy slipping into its third recession in four years. Miners - whose steep slump earlier this year means investors are increasingly seeing value - were among the top gainers for a third day, cheered by a pick-up in copper and gold prices. The sector is trading at just 10.7 times its expected earnings for this year, according to Thomson Reuters StarMine data, significantly below the 12.1 times average for the FTSE. "They are the worst-performing sector year-to-date, everyone is still underweight. The gold price is up, the copper price is up, and I think they (the miners) should keep going - they are the only sector that's derated this year," said Nick Xanders, who heads up European equities strategy at BTIG. The FTSE 100 was up 15.02 points, or 0.2 percent, at 6,446.478 points by 0739 GMT after rising 2.4 percent in the previous two sessions in its best two-day run since early January. Some of the more domestic-focused sectors though, such as real estate and retailers , lagged the overall market ahead of UK gross domestic product data due at 0830 GMT. The consensus is for 0.1 percent GDP growth in the first quarter versus the previous three months, although seven of the 51 economists polled by Reuters forecast a contraction. In case of a weak number, domestic-focused stocks could be hit further, although the overall impact on equities could be limited both by the international skew of the FTSE 100 blue chips and by the possibility of more central bank action to stimulate the economy. Earlier this week, a run of soft numbers out of the euro zone, including the keenly-watched German Ifo, fuelled expectations of an interest rate cut from the European Central Bank and actually proved a key catalyst for equity market gains. "We are at the stage in the market, where bad news is good news because it actually forces a central bank's hand," said Xanders at BTIG. Any stimulus, though, takes a while to filter through into better corporate earnings, with companies' bottom lines still suffering from weakness in the UK and euro zone economies. A weak performance in Europe contributed to weaker-than-expected first quarter sales at Unilever, sending its shares down 2.1 percent. "After a sustained period of outperforming market expectations, today's update is the first miss for a number of years and as such we may see a notably weakness in the share price today," Darren Shirley, analyst at Shore Capital, wrote in a note. "However, we remain positive on the merits of Unilever and reiterate our 'buy' recommendation." Unilever trades on around 21 times its earnings - the most expensive in nearly 13 years and compared to an average of just 14 times for the FTSE, according to Thomson Reuters Datastream. (Editing by Stephen Nisbet) Link this Share this Digg this Email Reprints

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