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FTSE up 0.6% by mid-day; miners, banks rise

FTSE up 0.6% by mid-day; miners, banks rise
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First Published: Tue, Jul 14 2009. 04 14 PM IST
Updated: Tue, Jul 14 2009. 04 14 PM IST
London: London’s top share index rose by midday Tuesday, lifted by a buoyant mining sector as metals prices rallied, and with banks firmer ahead of eagerly-awaited quarterly results from Goldman Sachs.
By 1032 GMT, the FTSE 100 index was up 25.76 points or 0.6% at 4,227.89, after closing 1.8% higher on Monday.
The index has gained over 22% since hitting a six-year low in March, but is still down 4.6% for the year.
“We’ve defined 4,000 as a very strong support point to the current market now,” said Stephen Pope, chief global market strategist at Cantor Fitzgerald.
“Hopefully we’re going to be able to build our bases in the region of the 4,200, 4,300’s for the summer and just try and move on from that as we see earnings coming through, and I’m convinced that earnings will actually be surprising to the upside against completely negative,” he said.
Miners added the most points to the blue chips, with the sector higher as metals prices rose.
Anglo American, Antofagasta, BHP Billiton, ENRC and Rio Tinto added 2.3-4.4%.
Banks advanced, still riding on momentum from the US markets, buoyed after influential bank analyst Meredith Whitney, who had previously been bearish, said in comments to CNBC television that bank shares were in for at least a short-term gain of 15%.
Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland put on between 1.7 and 3.1%.
Strength was also seen among insurers. Legal & General, Old Mutual and Prudential added 1.6-2.8%.
Energy stocks pushed higher, as crude stayed above $60 a barrel. BP added 0.8%, BG Group firmed 0.7% and Tullow Oil climbed 3.1%.
Vodafone was the biggest single drag on the blue chips, down 2.3%, after a downgrade from UBS to “neutral” from “buy” and a cut in the price target chilled appetite for the telecom giant.
UBS said in a note that economic pressures, market share loss and currency effects have combined to put pressure on earnings estimates at the telecoms operator, and that earnings will decline 11% this year.
Economic data gave modest cause for optimism.
The British Retail Consortium said retail sales rose in June as a heatwave drove consumers into shops to stock up on summer clothes, picnic food and garden furniture.
The BRC said like-for-like sales rose 1.4% last month compared with a year ago, more than reversing a 0.8% drop in May.
There was also encouraging news from the beleaguered housing market. House prices in England and Wales fell at their slowest annual pace in almost two years last month, while confidence in the price outlook turned positive for the first time since May 2007, a survey showed on Tuesday.
All eyes this afternoon be on US corporate performance, which will give more of a steer on the likely timing and intensity of economic recovery. Alongside Goldman Sachs, Intel and Johnson & Johnson are also scheduled to release quarterly results.
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First Published: Tue, Jul 14 2009. 04 14 PM IST