⌛ Did you miss ProPicks’ 13% gains in May? Subscribe now & catch June’s top AI-picked stocks early.Unlock Stocks

Foreign earnings hopes help FTSE offset retail woe

Published 03/31/2011, 04:50 AM
Updated 03/31/2011, 04:52 AM
UK100
-
HMb
-
VOD
-
KGF
-
TT
-
IPR
-
ARM
-
GC
-
FTNMX551030
-

* FTSE up 0.1 percent

* Gains capped by technical resistance

* Commodity stocks higher, investors hunt earnings growth

* Retailers wane as Mothercare isues profit warning

By David Brett

LONDON, March 31 (Reuters) - Commodities and tech stocks lifted Britain's top share index on Thursday, offsetting more retail gloom as analysts urged investors to seek companies whose earnings were boosted by foreign exposure.

London's blue-chip index, which has risen in the past six trading days, will find it hard to push further ahead with upside momentum likely to be capped by technical resistance, analysts said.

"On a more long term scale the 5,975 level remains the area capping any gains on the upside, and has done since early in March," James Hughes, senior market analyst, at Alpari UK, said.

The FTSE 100 was up 3.42 points, or 0.1 percent, at 5,951.72 by 0925 GMT, having risen 0.3 percent on Wednesday.

The index has risen 6 percent from its 2011 low at 5,591.59 on March 15, rebounding from sharp falls after Japan's March 11 earthquake, political trouble in the Arab world and European debt worries.

Traders said energy and mining stocks were being sought for their exposure to earnings growth outside Britain.

"The overall general trend is that the FTSE is split in two, with companies with largely foreign earnings driving the market higher and the companies with largely UK-focussed businesses struggling," Andrew Gibson, head of research at Galvan said.

Miner Vedanta rose 1.8 percent on hopes its deal for Cairn India would soon be ratified, which analysts said would be earnings accretive for Vedanta in the first year.

The Economic Times of India reported the London-listed metals and mining major has moved closer to acquiring control of Cairn India, with capital market regulator Sebi clearing subsidiary Sesa Goa's open offer for shareholders of the Indian oil and gas explorer.

Goldman Sachs, meanwhile, urged investors to look for growth in emerging markets. "We believe that the growth/inflation balance should improve in emerging markets. The early part of the tightening cycle is over in emerging market and the growth momentum is likely to accelerate for the rest of the year."

RETAILING GLOOM

Mothercare slid 9.5 percent after the mother and baby products retailer and wholesaler said profit from British retail operations will be under significant pressure in 2011/12.

That followed a profit warning from Dixons on Wednesday, and an update from Swedish budget clothing retailer Hennes & Mauritz , which undershot expectations for first quarter on Thursday.

Fashion retailer Next and Kingfisher, Europe's biggest home improvement retailer, each fell 1.1 percent.

International Power topped the FTSE 100 loser board, off 1.6 percent after JPMorgan lowered its target price for the utility, citing the risk of consensus downgrades and limited newsflow.

Banks were lower as traders cited their exposure to a sluggish domestic economy and with uncertainty over Europe's debt problems weighing on sentiment ahead of the results of Irish banking stress tests and a structural review.

Vodafone, the world's largest mobile operator by revenue, shed 0.9 percent after saying it was paying $5 billion to buy out Essar Group from its Indian joint venture.

On the upside, ARM Holdings added 1.1 percent, after BofA Merrill Lynch upgraded its rating on the chip designer, saying recent share price falls created a buying opportunity.

TUI Travel, Europe's biggest tour operator, rose 1.6 percent after reporting summer bookings were ahead, with customers booking alternative destinations following the unrest in Egypt and Tunisia. (Editing by Dan Lalor)

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.