A rally by heavyweight commodity issues helped haul Britain's top share index higher, after a choppy start to trading, with the only direction seen for investors being a key speech by Federal Reserve chairman Ben Bernanke on Friday.
|||A rally by heavyweight commodity issues helped haul Britain's top share index higher on Wednesday, after a choppy start to trading, with the only direction seen for investors being a key speech by Federal Reserve chairman Ben Bernanke on Friday.
Specialty miners and integrated oils reversed early falls as both copper and oil prices ticked up on hopes Bernanke will offer to provide further stimulus to support the faltering US economy.
At 10:34 SA time, the FTSE 100 index was up 13.21 points, or 0.3 percent at 5,142.63, having fallen back from an opening peak at 5,154.96.
The UK index, however, bounced off an early low of 5,098.14 just above a key support level at 5,096.17, a 23.6 percent retracement from its March 2009 low to February 2011 high.
“It's a choppy start as investors begin to wonder exactly will be the results of Bernanke's speech on Friday,” said Mic Mills, head of electronic trading at ETX Capital.
“Resistance at 5,200, however, seems to be in place and with little on the horizon which would give an excuse to test the upside we look to be stuck in the current range,” Mills added.
Banks , however, were a drag on the modest blue chip gains, with Lloyds Banking Group down 1.0 percent, and global heavyweight HSBC off 0.4 percent, as investors continued to shun the sector.
US blue chips jumped 3 percent on Tuesday as investors speculated that Bernanke would use his speech on Friday at the Fed's Jackson Hole, Wyoming symposium to signal more stimulus measures after a slew of weak economic data that has left investors fearing recession.
However Asian equities failed to carry over Wall Street's rally, with Japan's Nikkei share average shedding 1.1 percent after Moody' cut Japan's credit rating by one notch to Aa3 citing rising debt and slow fiscal reform.
MAN WANTED
Hedge fund manager Man Group was the top FTSE 100 gainer, up 4.4 percent after weekly net asset value data for the firm's flagship AHL fund, published after the close on Tuesday, showed a 4.3 percent weekly rise, and as HSBC upgraded is rating for the group to “overweight” from “underweight”.
HSBC also increased its target price for Man Group to 260 pence from 220 pence,. citing “higher quality management fees” as well as “stellar performance since June-end” on its flagship AHL fund as reasons for its upgrade.
Advertising group WPP was also a strong blue chip riser, ahead 3 percent after its posted 7-month growth broadly in-line with its annual forecast helped by strength in emerging markets.
And well-received first-half results also supported explorer Tullow Oil , up 4.2 percent.
But motor insurer Admiral was the biggest blue chip faller, sliding 7.5 percent after its first-half results disappointed, with analysts citing a rise in the company's combined ratio - a measure of how profitable an insurer is - as a reason for the stock's decline.
And outsourcing form Serco shed 5.4 percent after it said it sees challenges in the United States and UK lasting up to 24 months following first-half results.
No important British economic data is due on Wednesday, so investors will look across the Atlantic to US durable goods data at 14:30 SA time for any signs to the strength of the economy ahead of Bernanke's Jackson Hole speech.
“The market seems to have factored in a considerable portion of QE3 expected to be announced by Bernanke this Friday .. Now Bernanke is expected to announce QE3 the focus will be on the amount of asset purchases the Fed intend to make as according to Treasury yields the market has already factored in $500bn to $600bn of stimulus,” said Jordan Lambert, a trader at Spreadex. - Reuters
Source: http://www.iol.co.za/commodities-haul-choppy-ftse-higher-1.1124296
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