Reuters: Hot Stocks: UPDATE 1-Upbeat earnings push UK's FTSE towards 7-week highs

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UPDATE 1-Upbeat earnings push UK's FTSE towards 7-week highs Jul 24th 2013, 10:34 Wed Jul 24, 2013 6:34am EDT * FTSE 100 rises 0.6 pct * Kingfisher, EasyJet, ARM all up after results * Index faces resistance around 7-week highs (Updates prices, adds Kingfisher, fresh quotes) By Toni Vorobyova LONDON, July 24 (Reuters) - A wave of upbeat corporate earnings pushed Britain's benchmark equity index back towards seven-week highs on Wednesday, with signs of resilience among British consumers as the economy recovers. Kingfisher added 1.8 percent after Europe's biggest home improvements retailer reported a return to underlying sales growth in Britain, while budget airline EasyJet gained 7.8 percent on rising revenues. The pickup in the British economy, whose drivers include central bank stimulus and government initiatives to bolster the housing market, is expected to be confirmed by second-quarter gross domestic product data (GDP) showing the pace of economic expansion doubling to 0.6 percent. That has prompted banks such as Goldman Sachs and UBS to recommend long bets on British equities and led investors to take their most optimistic stance on the market in over a decade according to the latest Bank of America Merrill Lynch survey. "We have turned the corner now in the UK and it's amazing what a stimulus to the housing market can do for raising confidence," said Edward Bland, head of research at Duncan Lawrie Private Bank, which prefers British stocks to those in the euro zone. "Earnings expansion is on the cards for maybe double digits this year and next year," he added. The earnings rally helped lift the FTSE 100 39.67 points or 0.6 percent to 6,637.11 points, closing in on Tuesday's seven-week highs and thus on the tough technical resistance area around the 6,657 mark, where the rally has failed twice in the past five sessions. Strong earnings numbers on Wednesday also came from chipmaker ARM, which rallied 5.7 percent as markets had been anticipating a weak release following weak numbers from some of its technology sector rivals. "These results suggest this traction is very solid judging by the licence result, setting the business up for material royalty growth ahead, and we retain our positive view on the stock," analysts at Investec said in a note. Traders also pointed to forecast-beating iPhone sales from Apple overnight, which ARM supplies with chips, as further lifting the tech sector. (Editing by Hugh Lawson) Link this Share this Digg this Email Reprints

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