Reuters: Hot Stocks: Britain's FTSE in sight of 1-month highs, led by miners

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Britain's FTSE in sight of 1-month highs, led by miners May 3rd 2013, 07:53 Fri May 3, 2013 3:53am EDT * FTSE 100 up 0.1 pct, in sight of one-month peaks * SocGen's models show FTSE 3 pct overvalued vs NFP consensus * RBS falls as underlying numbers disappoint By Toni Vorobyova LONDON, May 3 (Reuters) - Britain's FTSE 100 index steadied in sight of one-month peaks on Friday as rallying copper cheered miners, but with investors reluctant to push the market too far before a key U.S. jobs report. Economists polled by Reuters forecast a rise of 145,000 in U.S. non-farm payrolls in April, although recent data has pushed investors to expect a lower number from what is arguably the most market-sensitive global data release. "The expectations have shifted to be somewhere around the 135,000-140,000 range. If there is a positive surprise, I would expect that we probably would see a good rally in stocks," said Adam Seagrave, trader at Saxo Bank. "We've had a good sustained rally at the start of the year ... and the next few weeks will be a real test. If we can hold these levels, then there is every chance that we could push higher again." The FTSE 100 was up 4.20 points, or 0.1 percent, at 6,464.91 points by 0736 GMT. Societe Generale's long-term fair value model shows the consensus forecast is in line with a FTSE 100 level of around 6,248 points, some 3 percent below current levels, which in turn are consistent with the creation of more than 275,000 jobs. The bank's models also show that a 100,000 upwards surprise on the payrolls should boost the FTSE by around 0.5 percent in the hour around the release. From a charts perspective, the index remained trapped within the range of the past seven weeks, with technical analysts looking for a break of the April 2 peak at 6,501.78 points to confirm fresh impetus to the upside, towards March's 5-year peak of 6,533.78 points. Miners - the third biggest sector in the UK index - led gainers, taking heart from a 2.6 percent jump in the copper price - its biggest daily gain in four months. Banks were weighed down by results from RBS. Shares in the state-owned bank fell 3.4 percent, with analysts saying that a small beat on headline profits hid weak underlying numbers, including revenues. "Overall, we expect the market to be disappointed, but perhaps not too surprised, by the weak Markets performance in the core business," Gary Greenwood, analyst at Shore Capital, said in a note. "Overall, we remain cautious on RBS shares which remains our least favoured stock in the sector. In particular, we highlight the weak core return on equity - 8.2 percent in first quarter - and the capital deficit, albeit improving." Ahead of the U.S. data, investors will watch the UK services April PMI at 0828 GMT, which is expected to show continued slow growth. As Britain's blue chips earn only around a quarter of their revenues at home, however, the impact of the data is likely to be limited. (Editing by Catherine Evans) Link this Share this Digg this Email Reprints

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