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Britain’s FTSE continues to rebound as Sainsbury, BHP outperform

Britain's FTSE continues to rebound as Sainsbury, BHP outperformLONDON: Britain’s top share index rose on Tuesday to extend a rebound after losing ground last week, lifted by supermarket group J Sainsbury and miner BHP Billiton.

The blue-chip FTSE 100 index, which had its worst weekly loss in 2015 last week, was up 0.4 percent at 6,831.53 points in early trading — leaving it just 2 percent below record highs of 6,974.26 points reached on March 2.

Sainsbury was among the top performers on the FTSE 100, rising by 0.8 percent as investors viewed the company’s latest results as less negative than feared.

The supermarket operator posted a fifth straight quarter of declining underlying sales and said it did not expect the trading environment to improve any time soon, but some analysts said that prospect had been factored into its share price already.

Still, others remained wary of UK supermarket stocks, given food price deflation and a fierce price war launched to counter the rise of discounters Aldi and Lidl.

“A lot of negativity had already been priced in on the supermarket stocks, so some people are starting to see them as longer-term recovery plays, but personally we see limited upside on Sainsbury and the supermarket sector. There are still a lot of negative headlines out on them,” said Dafydd Davies, partner at Charles Hanover Investments.

BHP SHARES BEAT ANTOFAGASTA

BHP Billiton shares rose 1.4 percent after details of the $ 13 billion spin-off of its South32’s mines and refineries assets, but rival miner Antofagasta fell 3.5 percent after reporting lower earnings.

Just Eat, an online marketplace for takeaway food, also advanced, by 2.1 percent, after posting higher earnings.

Although the FTSE hit record highs in March, it has still not gone on to break out above the 7,000 point level.

Some traders said uncertainty ahead of Britain’s election in May could hinder the FTSE’s progress.

“I would be a buyer on weakness, but not at these levels,” said Securequity sales trader Jawaid Afsar.

Copyright Reuters, 2015

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