Thursday, 14 August 2014

Firmer FTSE outperforms weaker European rivals


A man walks through the lobby of the London Stock Exchange August 5, 2011.REUTERS/Suzanne Plunkett

Britain's top equity index edged up on Thursday, with traders saying the UK market was enjoying a "flight to quality" as investors sold the German and French markets following weak European economic data.

The blue-chip FTSE 100 index .FTSE crept up 0.1 percent, or 6.42 points, to 6,663.30 points in the first hour of trading.

Even though the gains were meagre, the FTSE nevertheless beat falls of 0.3 percent on Germany's DAX .GDAXI and of 0.4 percent on France's CAC .FCHI.

Data showed that Germany's economy shrank in the second quarter while France again saw no growth.

The UK economy is set to grow faster than any other major developed nation this year, according to the IMF.

"The euro zone is still deep in the mire, although the UK economy is still showing some strong signs," Alpari chief market analyst James Hughes said.

Among stocks leading the FTSE higher were property company British Land (BLND.L), which rose 1.6 percent after Bank of America Merrill Lynch raised its rating on the stock to "buy" from "neutral".

Some traders remained cautious, however.

The FTSE 100 hit a peak of 6,894.88 points in mid-May, which marked its highest level since December 1999, but has since retreated and is down 1.3 percent since the start of 2014 as conflict rages in Ukraine and the Middle East.

"I still feel fairly cautious about the market. I might buy into the FTSE if it falls to 6,500 points," Securequity sales trader Jawaid Afsar said.

Reference: Sudip Kar-Gupta

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