Reuters: Hot Stocks: FTSE edges higher as stimulus trimming concerns ease

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FTSE edges higher as stimulus trimming concerns ease Jun 14th 2013, 16:37 Fri Jun 14, 2013 12:37pm EDT * FTSE 100 closes 0.1 pct higher in choppy trade * Miners top gainers' list on higher metals, Citi note * Charts show recovery as index hits oversold territory By Atul Prakash LONDON, June 14 (Reuters) - Britain's top share index ended slightly higher on Friday in a technical recovery from oversold levels and as fresh data eased concerns that the U.S. Federal Reserve might start to trim its stimulus programme anytime soon. Figures showing a retreat in U.S. consumer sentiment this month and a below-forecast reading of industrial production helped the blue chip FTSE 100 index to end 0.1 percent higher at 6,308.26 points. However, the index posted a fourth straight week of losses following recent steep sell-offs on concerns the U.S. central bank could trim the pace of bond purchases. The index had advanced 30 percent in a year to climb to a 13-year high late last month on central bank-induced liquidity measures. Investors trained their sights on next week's meeting of the Federal Open Market Committee for hints about the U.S. central bank's next move regarding its quantitative easing (QE), but analysts stayed generally positive on the market. "The data that we have seen today is certainly a nail in the coffin for those who believe in an early QE tapering," said James Butterfill, global equity strategist at Coutts. "We like miners as we think that they are putting less focus on capacity expansion and more on returns to shareholders. It's about looking for yields at reasonable prices and it's hard to find that in the defensive sector." Miners were the top gainers, helped by a rise in key base metals prices on supply concerns and by a positive note by Citi, which lifted its rating on the European basic resources sector to "overweight", citing valuation grounds. The UK mining index climbed 1.8 percent, while Anglo American and BHP Billiton rose 1.9 percent and 1.4 percent respectively. CHOPPY OUTLOOK Analysts said the market was likely to remain choppy in the coming weeks as investors were nervous and the market's near-term direction was unclear because of recent mixed data. "Another very interesting week, with the bulls focusing on the continued declines being an opportunity to get back into the multi-year central bank stimulus-fuelled uptrend," Mike van Dulken, Head of Research at Accendo Markets, said. "The bears will likely be looking for opportunities to keep playing the current shorter-term downtrend. Macro data (is) still mixed and stimulus from the world's most important central bank is as uncertain as ever." Charts suggested that the index was likely to recover in the near term after falling for four consecutive weeks to the lowest since late January in the previous session. "The index has approached a key support level at around 6,200, which coincided with the market being oversold," Julian McCormack, technical analyst at Brewin Dolphin, said. "The market has come off nearly 10 percent since late May and the downside is limited with the current oversold conditions." The FTSE 100's 9-day relative strength index (RSI) was at 30, suggesting the index had moved into oversold territory and could recover, he said, adding the market could find support at around 6,200 which was held several times this year. (Editing by Keiron Henderson) Link this Share this Digg this Email Reprints

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