Technically driven FTSE adds seasonal cheer

Britain's leading share index posted solid gains on Friday's final half-day trading session before Christmas, albeit in very thin volumes, with technical factors the main driving force ahead of the long holiday. At the close, the FTSE 100 index was up 55.73 points, or 1.0 percent, at 5,512.70, extending the previous session's 1.3 percent rise and pushing further above the key 50-day moving average of around 5,450. Volume, however, was just 22 percent of the 90-day daily average, and technical analysis of the index remained cautious.
"While its recent price action has nudged it up through its 50-day moving average the fact remains that the UK index is stuck in a downtrend that has been keeping it in check since July and it would have to break decisively through 5,600 for that situation to change," said Bill McNamara, technical analyst at Charles Stanley.
The belated pre-Christmas rally means the FTSE 100 index is now marginally positive for December - at its lowest the index was down 3.2 percent. US stock index futures, pointed to Wall Street also edging higher on Friday, extending a rally into a fourth session, as labour market and other data in the United States on Thursday pointed to a strengthening economic recovery. Another batch of US data is due after the UK market close, including November's personal income figures along with durable goods at 1330 GMT, and November new home sales at 1500 GMT. Integrated oils were the top sector performers helped by investors' improving risk appetite and supported by higher crude prices, with BP ahead 2.1 percent and BG Group up 1.0 percent.
Oil explorer Tullow Oil was the biggest blue chip gainer, up 3.1 percent. Miners also found support as copper prices rallied 1 percent, as demand hopes rose after recent US data, with Antofagasta up 2.4 percent. The banking sector also gained, mainly thanks to strength in global heavyweight HSBC up 0.3 percent, while Barclays added 1.6 percent as eurozone debt exposure worries faded following this week's injection of liquidity by the European Central Bank (ECB).
The ECB authorised a hefty 489 billion euros of loans to the region's banks on Wednesday, although investors were doubtful as to how much of the funds will actually flow into struggling eurozone economies and help restore confidence in the system. Part-state-owned lenders Royal Bank of Scotland and Lloyds Banking Group missed out on the sector advance, giving back some of the week's gains, down 0.3 percent and 0.6 percent respectively.
There was also an element of position-squaring among investors ahead of the long holiday, with trading in London equities not due to resume until Wednesday. Selected defensively perceived stocks were higher, with market heavyweight Vodafone up 1.6 percent, and power generator National Grid ahead 2.5 percent.
Drinks group Diageo added some festive fizz, up 1.5 percent, while brewer SABMiller gained 2.2 percent. "Having survived the rest of the week without any major European crisis news, traders will be happy to head into the long Christmas weekend with some optimism. A continued rally should be expected if the "no Europe news is good news" scenario (is maintained) until the New Year," said Will Hedden, sales trader at IG Markets.