Reuters: Hot Stocks: FTSE pauses after rally, M&S sees strong gains

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FTSE pauses after rally, M&S sees strong gains Apr 11th 2013, 08:31 Thu Apr 11, 2013 4:31am EDT * M&S jumps; trading update better than feared * Miners retreat after strong gains * AB Foods hurt by SocGen downgrade By Tricia Wright LONDON, April 11 (Reuters) - Britain's blue chip shares were flat on Thursday, pausing after three straight days of gains, though Marks & Spencer outperformed after a trading update that was not as weak as some had expected. The FTSE 100 was up 2.62 points at 6,389.99 by 0810 GMT, after rising 2.2 percent over the previous three sessions. "Looking at a pretty slow start this morning (but) ... I expect the FTSE ... to continue on what has been a rather nervy rally with very little volume," said James Hughes, chief market analyst at Alpari (UK). "These rallies always have traders worried as the foundations the move lies on can be very shaky and a sharp collapse is never too far away," he said. Traders noted a lack of conviction in the market, with some investors reluctant about placing any large bets before the U.S. earnings season gets underway in earnest. "I think once we get into the meat and drink of earnings season in the U.S. we will know whether this rally has more legs," Will Hedden, sales trader at IG, said. Marks & Spencer grabbed the top spot on the blue chip leader board, up 3.2 percent in brisk trade. Although the retailer posted a seventh consecutive quarterly fall in underlying general merchandise sales, the outcome was a touch ahead of expectations. Trading volume in M&S stood at 100 percent of its 90-day daily average after just over an hour into Thursday's session, while turnover for the FTSE 100 was a mere 10.7 percent of its 90-day average. Shore Capital repeated its "buy" rating on M&S following the update, which it said brought a "sense of relief of sorts" with "some very good features contained within." "Within the statement the key trading figure is that for like-for-like (LFL) sales in its core general merchandising (GM) categories in the UK, which came in at minus 3.8 percent. This figure is poor but a little better than we feared going into the statement," the broker says in a note. On the second tier, emerging markets specialist Ashmore Group jumped 11.6 percent after attracting $7.3 billion of net new money into its funds during the first three months of the year, boosted by investor demand for its debt funds. Sticking with financials, Man Group advanced 6.6 percent. The hedge fund firm said on Thursday it has been able to unlock $550 million in capital following a change in its regulatory status that has reduced its corporate risk profile. Mining stocks limited the UK benchmark's progress, succumbing to a bout of profit taking after hefty gains in the previous session when trade data from top metals consumer China fuelled expectations for improving demand. Steelmaker Evraz was the biggest FTSE 100 faller on Thursday, dropping 10.6 percent, after it slid to a surprise 2012 loss and cautioned on its outlook. Elsewhere among the laggards, Associated British Foods shed 1.4 percent, with traders pointing to a downgrade to "hold" by Societe Generale, with the bank citing valuation grounds. (Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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