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FTSE ends higher ahead of Obama speech on jobs

Published 09/08/2011, 12:47 PM
Updated 09/08/2011, 12:52 PM
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* FTSE 100 ends up 0.4 percent

* Longs buoy oils ahead of Obama jobs speech

* Glencore the top gainer; Admiral hit by competition probe

By Simon Jessop

LONDON, Sept 8 (Reuters) - Britain's leading shares ended higher after a volatile session on Thursday, as investors emerged for beaten-down growth stocks to put a floor under the market ahead of a key speech on job creation by U.S. President Barack Obama.

By the close the FTSE 100 was up 0.4 percent at 5,340.38 points, taking a rally into a third straight day after an intraday trading range of 100 points, or 1.8 percent.

Integrated oil and gas stocks including BG Group , up 1.8 percent, BP up 0.5 percent, and Royal Dutch Shell up 0.6 percent, were among the stocks adding most points to the index.

"Today feels like real buying across the board, among growth and cyclical plays such as oils and tech. Which is why people trying to whack the market down are struggling to do so," a portfolio trader at a leading U.S. investment bank said.

"It feels like there are legitimate long-only participants coming back to the market, and as a consequence, it seems a bit more buoyant, even in the face of bad news," although it was as much to do with the lighter selling pressure, he said.

That bad news came in the form of a weakening euro zone growth outlook, courtesy of the European Central Bank as it kept interest rates steady. The Bank of England had earlier kept British rates unchanged, as expected.

U.S. data added to a mid-afternoon session slide after jobless claims unexpectedly rose, although a narrowing in the U.S. trade deficit raised expectations for third-quarter gross domestic product among some analysts.

That helped buoy the market into the close, as did short-covering heading into Obama's speech, due at 2300 GMT.

While longs such as pension funds were picking up quality names at low valuations, "in terms of hedge fund land, I do not think there is too much risk being put on. They are all playing but not to the same extent. So the gross exposure, which might have been in excess of 100 is now probably below 100."

GLENCORE GAINS

Among individual gainers, Glencore led risers across Europe, up 7.6 percent, after First Reserve International sold out of $800 million in convertible bonds and bought into the firm's equity.

The resources heavyweight, heavily sold off since listing earlier in the summer, also received a boost from news it had been accepted to bid in the next round of oil and gas exploration contracts in energy-rich Iraq.

Among the biggest volume movers across the index was WM Morrison Supermarkets , up 4.2 percent in volume nearly three times its 90-day average, buoyed by strong half-year results.

Admiral , Britain's biggest motor insurer, was the top faller, down 2.4 percent after the Office of Fair Trading launched a competition probe into the sector.

The news boosted other insurers, however, including rivals Aviva and RSA Insurance , both up around 2 percent. (Editing by Dan Lalor)

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