LONDON: Strong miners drove Britain's top shares higher on Friday as metals prices recovered their poise and forecast-beating German GDP figures helped sentiment, but some investors cautioned the rise could be short-lived.
The FTSE 100 was up 51.12 points, or 0.9 percent, at 5,996.08 by 0856 GMT, taking its cue from Wall Street which turned around a losing session to gain in the final hours.
The UK index had closed 0.5 percent lower on Thursday.
"(The) FTSE is firm across the board this morning -- it's been a long week and people are taking off their negative bets ahead of the weekend," said Lex van Dam, hedge fund manager at Hampstead Capital, which has $500 million of assets under management.
"Technically the market is still very vulnerable so I would use strength to sell positions," he said.
Buyers came in for the miners, which rebounded from the previous session's declines in tandem with metals prices as investors shrugged off another bank reserve requirement hike in China.
Shares in Anglo American and BHP Billiton both rose 1.4 percent while Xstrata added 1.2 percent.
The mining sector ranks second in terms of weighting on the FTSE 100, behind integrated oils.
Meanwhile, Germany's GDP rose by 1.5 percent in seasonally adjusted terms in the first quarter, growing faster than all expectations given in a Reuters poll of 38 economists, giving market sentiment a lift.
The FTSE 100 volatility index, a measure of investor anxiety, fell 5.4 percent on Friday.
The lower the index higher the investor appetite for risky assets such as stocks.
BANK STRENGTH
Risk sensitive banks found favour, with Barclays the best off on the back of a Citigroup upgrade to "buy", although worries over debt contagion in Europe lingered in the background.
Shares in Barclays added 1.5 percent.
The International Monetary Fund said on Thursday that despite bailouts for Greece, Ireland and Portugal, Europe's debt crisis may yet spread to core euro zone countries and emerging Eastern Europe.
On the second tier, London Stock Exchange topped the leader board, up 3.6 percent after beating full-year results forecasts -- a boost for the British exchange which has seen its share of domestic equities trading slump dramatically in the past three years.
No important British economic data will be released on Friday, but the market could get further direction from U.S. data, with April inflation numbers due at 1230 GMT, and the Reuters/University of Michigan consumer sentiment survey for May out at 1355 GMT.
"Last week's payroll figures may have impressed but it's hardly been a one way street in terms of positive economic data out of the U.S. of late so any wobbles here could easily result in further selling going into the weekend break," Ben Potter, research analyst at IG Markets, said.
Comments
Comments are closed.