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Banks, miners push FTSE up for 6th session

Published 03/30/2011, 04:43 AM
Updated 03/30/2011, 04:48 AM
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* FTSE 100 up 0.6 percent, longest winning streak since August

* Miners, banks positive

* Retailers hit by Dixons results

By Simon Falush

LONDON, March 30 (Reuters) - Banks and miners pushed Britain's FTSE 100 higher on Wednesday, with investors focussing on an improving outlook for company earnings and with technical indicators pointing to further gains.

By 0915 GMT, the FTSE 100 was 36.16 points, or 0.6 percent higher, at 5,968.33 after rising 0.5 percent on Tuesday.

The index is up for six consecutive sessions, its longest winning streak since August. It is up 1.1 percent for the year.

Cyclical miners and banks, which tend to perform well when appetite for risk increases, provided the bulk of the gains.

Vedanta Resources added 4.1 percent, the top FTSE 100 gainer, with traders citing a note from Morgan Stanley which said the India focused miner has a 64 percent upside.

Global miner Rio Tinto gained 1.5 percent while Europe's largest bank HSBC put on 0.6 percent.

Randgold Resources however bucked the trend, slipping 0.9 percent after Societe Generale started coverage of the precious metals miner with a "sell" rating.

The FTSE 100 saw a sharp rebound last week from falls earlier in the month prompted by worries over the euro zone debt crisis, political turmoil in the Arab world and the aftermath of the earthquake in Japan.

"People are more nervous than they were because of the Middle East, oil prices and Japan but corporate momentum is sufficiently strong to sustain the economy, and there's a view that the issues are transitory," John Haynes, head of research at Rensburg Sheppards said.

"Of course if Saudia Arabia goes pop, all bets are off, but for now people are taking the view that these things will pass and there's no need (for companies) to redraw plans."

IMI rose 2.4 percent, among the top performers, after RBC Capital Markets, in a broader upbeat note on UK industrials, selects the engineering firm as its "top pick" in the sector.

6,000 LEVEL EYED

Technical analysts said that the index looks set to retest the 6,000 level, with Michael Hewson saying that the March high of around 6,040 could be reached soon as long as the index closes above its 55 day moving average at 5,945.

The index is above its 50-day moving average for the first time since March 8.

However, reminding investors that companies exposed to the domestic economy face tough times ahead, midcap electronics chain Dixons Retail slid 11 percent. Blue-chip retailers Next and Marks & Spencer both fell around 1 percent.

Investors will look to glean more of an insight into the outlook for retailers from March's CBI distributive trades report, due at 1000 GMT.

With the market focused on Friday's U.S. March nonfarm payrolls report, March's Challenger Layoffs numbers and ADP National Employment survey, due at 1130 GMT and 1215 GMT respectively, will give an idea of the jobs situation across the Atlantic.

Ex-dividend factors knocked 4.4 points off the FTSE 100 index, with Anglo American, British Land, British Sky Broadcasting, Eurasian Natural Resources, Prudential and Smiths Group all trading without their payout attractions. (Editing by Hans Peters)

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