Reuters: Hot Stocks: Britain's FTSE gains on prospects of economic recovery

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Britain's FTSE gains on prospects of economic recovery Jun 26th 2013, 11:19 Wed Jun 26, 2013 7:19am EDT * FTSE 100 rises 1 pct, up for 2nd session * Fresh signs of recovery in U.S. economy help * Banking shares top gainers, HSBC up By Atul Prakash LONDON, June 26 (Reuters) - Britain's top share index climbed for a second straight day on Wednesday, with further encouraging data reassuring investors the U.S. economy was strong enough to withstand any cut in the Federal Reserve's stimulus. Macroeconomic figures on Tuesday showing strong gains in business spending plans last month and the largest annual rise in house prices in seven years in April suggested the economy was gaining momentum and brought investors back into the stock market, which was badly hit in the recent past. At 1101 GMT, the blue-chip FTSE 100 index was up 58.92 points, or 1 percent, at 6,160.83. 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 Fed to trim its stimulus sooner than expected. "The market is clearly in a transitional period in which good news from the economy should be taken as good news for the equity market. I believe this bounce is sustainable," Daniel Harris, director and head of dealing at H2O Markets, said. "People have just started to look at the positive side and probably realise that the Fed may not be able to withdraw its stimulus support any time soon, and if it does, it means that we have a quite healthy economic situation to build from." Harris saw the index rising to a high of 6,500 in the run up to September after the summer break, saying those, who were on the sidelines, were getting back and some of his clients, who were long-term players, were now showing interest in equities. The rally was also helped by comments from the heads of the European Central Bank and the Bank of England in the previous session, hinting the Fed's announcement last week would not lead them to follow suit and unwind their growth-supporting policies. Banks were the top gainers on expectations the continuation of an easy monetary policy in Europe and a recovery in the U.S. economy will help the sector. The FTSE banks index rose 1.4 percent, while HSBC was 1.4 percent stronger. However, Cliff Green, an independent technical analyst, advised caution and said 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. I would like to see several weeks of consolidation to form a platform to improve its technical outlook," he said. He saw an important resistance at around 6,400, a 50-percent retracement of its recent fall. Support was seen at 6,000. Utilities were also in demand, with United Utilities rising 0.9 percent and National Grid up 0.8 percent. "I see some upside in the utility sector and like stocks such as United Utilities and National Grid. People are looking to go heavily long from here with a preference toward sectors and stocks that are going to remove some risks and provide some yield as well," Harris said. (editing by Ron Askew) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions