Reuters: Hot Stocks: Britain's FTSE ends higher on central bank assurances

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Britain's FTSE ends higher on central bank assurances Jun 26th 2013, 16:26 Wed Jun 26, 2013 12:26pm EDT * FTSE 100 index closes 1 percent higher * Central bank comments support market * Index remains vulnerable, charts show By Atul Prakash LONDON, June 26 (Reuters) - Britain's top share index finished higher for a second straight session on Wednesday, with soothing comments from central banks reassuring investors that the accommodative monetary policies would stay longer. The European Central Bank President Mario Draghi reiterated that an exit from the central bank's exceptional monetary policy measures remains distant, while China's central bank pledged to prevent a credit crunch. The FTSE 100 index ended 63.57 points, or 1 percent, higher at 6,165.48. It rebounded after falling 12 percent from a 13-year peak in late May to a seven-month low on Monday on concerns a recovery in the U.S. economy might prompt the U.S. Federal Reserve to trim its stimulus sooner than expected. Analysts said the market remained vulnerable to sell-offs and investors should trade cautiously ahead of the European summer holiday period, which often proves to be volatile because of lower trading volumes. "Central bank jaw boning, coupled with end-quarter massaging, is driving stocks," Jeremy Batstone-Carr, head of private client research at Charles Stanley, said. "But markets are nervous, sentiment is brittle and this mini revival has a whiff of dead cat about it." Charts also showed that recent falls in equities had done some damage to the FTSE 100's uptrend structure and any recoveries could just be a short-term bounce. "Rallies are going to prove unsustainable. If we are going to resume a long-term bull cycle, we have to rebuild at these lower levels and that could happen over the summer months," Cliff Green, an independent technical analyst, said. "I would like to see several weeks of consolidation to form a platform to improve its technical outlook," said Green, who saw an important resistance at around 6,400, a 50-percent retracement of its recent fall. Gerard Lane, equity strategist at Shore Capital, said the market was recovering from a deeply oversold position and stocks were assisted by Draghi's comments, but added that equities needed to ease further to become cheap. Among sectoral movers, banks were the top gainers on expectations the continuation of an easy monetary policy in Europe will help the sector. The FTSE banking index rose 1.4 percent, while HSBC was 1 percent stronger. Aberdeen Asset Management rose 4.7 percent to top the gainers' lost on the FTSE 100, with analysts saying that the index was bouncing back on technical reason after sharply falling in the past sessions. However, miners slipped on a sharp drop in precious metals prices. UK mining index fell 1 percent, while gold miner Anglo American dropped 3.3 percent. (editing by Ron Askew) Link this Share this Digg this Email Reprints

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