Wednesday, 25 March 2015 21:50
LONDON: Britain’s leading share index gave up early gains on Wednesday and edged lower, led down by Barclays after a broker downgraded the stock.
The blue-chip FTSE 100 index was down 9.09 points, or 0.1 percent, at 7,010.59 points by 1512 GMT, having hit a record intra-day high of 7,065.08 on Tuesday.
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The index has gained nearly 7 percent so far this year and is up about 15 percent since the middle of December, helped by a strong recovery in the British economy and a bond-buying programme by the European Central Bank.
The index had rallied for six straight days before ending lower on Tuesday after reaching its peak.
“I’m not surprised to see us pause at these levels, as after the strong run we’ve seen, the index has hit a region of resistance around 7,050,” said Fawad Razaqzada, technical analyst at Gain Capital, adding that the index should be supported by previous resistance around 6,900.
“Having made new highs so recently, however, the path of least resistance is clearly still to the upside.”
Barclays was the biggest drag on the index, down 2.7 percent and trimming 4.5 points off the index after Investec downgraded its rating on the stock to “hold” from “buy”.
However, the market was underpinned by gains in commodity stocks, which have been laggards so far this year to date. Oil & Gas firms added 11 points to the index as the price of Brent firmed.
The rise helped Britain’s FTSE to outperform continental shares, with the Euro STOXX 50 down 0.8 percent.
“The FTSE is resilient in the face of European markets that are going nowhere. Commodity stocks are still playing catch-up, which helped the rally last week and is also supporting now,” Chris Beauchamp, market analyst at IG, said.
Travel firm TUI was the top FTSE 100 gainer, rising 2.6 percent after it said it was confident of meeting a target to lift full-year underlying operating profit by 10 to 15 percent, helped by rising holiday sales and prices.
“This is also a positive signal for the entire sector, which is getting some tailwind from lower fuel prices and relatively more money in the hands of consumers due to lower inflation,” said Securequity sales trader Jawaid Afsar.
British infrastructure group Balfour Beatty rose 6.4 percent, the top mid-cap FTSE 250 riser, despite scrapping its dividend after suffering a loss of 59 million pounds ($ 87.6 million) in 2014. Shares rose as the market welcomed signs that the company was tackling its problems.
Copyright Reuters, 2015
