Reuters: Hot Stocks: Heavyweights HSBC, Glaxo push UK's FTSE back near 13-year highs

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Heavyweights HSBC, Glaxo push UK's FTSE back near 13-year highs May 28th 2013, 11:04 Tue May 28, 2013 7:04am EDT * HSBC, Glaxo add most points to FTSE 100 * Long-term rising trend still seen as intact * Some investors looking to book profits on rally By Sudip Kar-Gupta LONDON, May 28 (Reuters) - Gains in HSBC and GlaxoSmithKline, seen as more resilient to any economic downturn, led a rebound in Britain's benchmark share index on Tuesday, pushing it back near 13-year highs. While some traders felt a near-term pullback was possible, many said the equity market's longer-term upwards trend remained intact, with stock markets buoyed by pledges of monetary stimulus from major central banks. The benchmark FTSE 100 index was up 1.6 percent, or 108.72 points, at 6,763.06 in mid-session trading. After touching its highest level in nearly 13 years last week, the index fell 2.7 percent in just two days after the U.S. Federal Reserve said it was considering exit strategies from its stimulus programme. The Bank of Japan and the European Central Bank, however, have indicated in recent days that their expansive policies will remain in place. The market was closed on Monday for a public holiday. Monetary stimulus measures from the Fed and other major central banks have hit returns on bonds and cash, driving investors over to the better returns on offer from equities and sparking the stock market rally. Hartmann Capital trader Basil Petrides said that falls on the FTSE 100 had been relatively short-lived and minor so far and investors should still look to use days when the market fell to add to equity positions. "I would still buy on the dip. I see continued strength in this market," he said. DEFENSIVE STOCKS RISE Global bank HSBC recovered from a 2.1 percent fall on Friday to rebound by 2.6 percent to add the most points to the FTSE 100. Healthcare stock GlaxoSmithKline rose 2.3 percent to give one of the biggest lifts to the FTSE after Deutsche Bank upgraded the stock to "buy". Brown Shipley fund manager John Smith said both HSBC and Glaxo were among his favoured stocks, with the two seen as relatively "defensive" given their diversified set of earnings from a broad range of economies and solid dividend payouts. "HSBC is benefiting from its exposure to an economic recovery in the United States, and we also like consumer goods stocks such as Diageo, and BAT (British American Tobacco) along with Glaxo," said Smith. Nevertheless, Smith was wary of adding to equity positions at current levels. He said he would look to take profits on the rally so far, with the FTSE up nearly 15 percent since the start of 2013. "I am quite content to sit on the sidelines and take a bit of profit." (Additional reporting by Alistair Smout and David Brett; Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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