Reuters: Hot Stocks: Financials, retailers help FTSE index rise

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Financials, retailers help FTSE index rise Jun 4th 2013, 08:44 Tue Jun 4, 2013 4:44am EDT * FTSE 100 index rises 0.7 percent * Retailers up on encouraging retail sales data * Wolseley falls after quarterly results By Atul Prakash LONDON, June 4 (Reuters) - Britain's top share index rebounded on Tuesday with retailers gaining on UK sales data and financials rising on hopes the U.S. central bank will not scale back its stimulus programme soon. UK banks rose 1.1 percent after Monday's data showed the U.S. manufacturing sector contracted in May, leading to expectations the Federal Reserve will keep buying bonds. Retailers were also in demand after data showed British retail sales rebounded in May. Tesco was up 1.2 percent and J Sainsbury gained 0.8 percent. At 0808 GMT, the FTSE 100 index was up 47.29 points, or 0.7 percent, at 6,572.41, after falling 0.9 percent in the previous session to 6,525.12, its lowest since early May. Analysts said that accommodative monetary policies by central banks were expected to support cyclical sectors. Gerard Lane, equity strategist at Shore Capital, said the financial sector was likely to benefit from U.S. quantitative easing, which was to stay if economic data remained weak. Charts also painted a positive picture as the FTSE 100 rebounded after reaching closer to a critical support in the previous session. It rose after trading near 6,500, a peak in March-April and derived from the uptrend line drawn through its November and April lows. "The FTSE has found support on the daily chart and a rally from here would suggest that recent weakness has been a healthy correction within the longer-term uptrend," Dominic Hawker, technical analyst at Westhouse Securities, said. He saw a short-term resistance at the top of the downward correction channel at 6,650. However, some analysts said that recent movements in equity prices were divorced from the macroeconomic reality and more corrections were possible. "We are becoming somewhat concerned by the apparent deterioration in global free cash generation, so we like those companies and sectors which can demonstrate reliable FCF (free cash flow) yields," said Jeremy Batstone-Carr, head of private client research at Charles Stanley. Among sharp movers, Wolseley fell 3 percent to top the losers' list, with analysts saying that its quarterly operating profits were disappointing. (Reporting by Atul Prakash. Editing by Jeremy Gaunt.) Link this Share this Digg this Email Reprints

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