Tuesday 23 January 2018

Britain's FTSE inches up to highest close in nine months

Alistair Smout

BRITAIN'S blue-chip index posted its highest close in nine months today, supported by strong German economic data but enduring a late sell-off as it balked at technical resistance.

The FTSE 100 closed up 3.34 points, or 0.1 percent, at 5,924.97, edging off an intraday high of 5,937.93 on a bout of selling in the last 45 minutes of trading.

The sell-off dragged the index back below a September intraday high that had been the top end of recent ranges.

"A close above the September high of 5,932.62 would be a very positive sign, but with resistance at the year high (of 5,989) before we get to 6,000, I'd still be patient," said Phil Roberts, head of technical analysis at Barclays Capital.

Having stalled at that level, Roberts said he was looking for support around the 5,830 level.

Despite failing to post a strong close, the index did rise for the fifth day in a row, the second such run this month and only the fourth this year.

Supporting the rise was a much bigger than expected jump in Germany's influential ZEW survey of economic sentiment in November. The FTSE 100 added 0.2 percent in the 70 minutes after the data.

"The market needed a catalyst to finally break that magnetism that the 5,900 level had been having on the FTSE, and arguably today's ZEW confidence figures from Germany have not only beaten expectations but fairly smashed them," said Alastair McCaig, Market Analyst at IG Index.

He added that the FTSE was less exposed to the ZEW survey than European markets, but the stronger gains they posted also helped lift the UK index. Germany's DAX closed up 0.8 percent, with the French CAC and the Spanish IBEX indexes up 0.9 and 1.5 percent, respectively.

Miners were among the top gainers in Britain, with basic materials adding 6 points and bringing the index into positive territory. Miners are sensitive to global economic sentiment, and were further supported as a ZEW economist said Germany was not heading for recession.

Whitbread, was among the top gainers, rising 2.5 percent as Britain's biggest hotel and coffee shop operator posted a rise in third-quarter sales helped by greater demand for its expanding Costa brand.

"Whitbread continues to please, despite the dual headwinds of tough comparatives and a post-Olympic slowdown, which had already been trailed," said Richard Hunter, head of equities at stockbroker Hargreaves Lansdown.

"The company continues to benefit from being well-positioned in a cost-conscious consumer environment, and this momentum has filtered through to both the underlying numbers and, indeed, the share price."

Tullow Oil lost 8.4 percent, making it index's biggest faller, in volume nearly four times its 90-day average after it said a well drilled off the coast of Ghana found no oil in its main target area. (Additional reporting by Atul Prakash; Editing by Hugh Lawson)

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business