BD - I had the pleasure of giving you the first thumbs up tonight (at least it's still night here in Perth, 3hrs behind the centre of the universe). I bumped into one of your tennis buddies from King's Park tonight, and she also asked me to give you the thumbs up for all your efforts on the XJO threads.
FTSE Looks to Break out of Range, Led by Miners
By David Brett | October 12, 2011 10:31 AM EDT
Miners led a rebound by Britain's top shares by midday on Wednesday, on hopes of further demand being seen in China, while technical indicators suggested the FTSE might break out of its recent range.
The mining sector, which remains off 30 percent this year despite a 20 percent rise in the past week, gained in tandem with base metal prices as expectations rose of potential restocking in China boosting demand.
LME copper stocks in Korea and Singapore, locations nearest China, have been declining sharply since the end of September.
Miners bounced back from a weaker start when the sector was hit by disappointing results from U.S. aluminium group Alcoa , and a warning from its CEO of weak economic conditions through the year, particularly in Europe.
The FTSE 100 , however, remained robust in the face of threats to global growth, rising 25.92 points, or 0.5 percent to 5,421.62 by 1104 GMT,.
The index bounced off an intraday low of 5,348.16 in tandem with a turnround in U.S. futures, which pointed to a sharp rise at the open on Wall Street.
"The market is feeling a bit more protected with the level of 'puts' going up on the volatility index. I still feel it hasn't got any momentum behind it and 3Q earnings may be bearish on outlook statements," a London-based trader said.
The trader also pointed out the FTSE had taken out the 5,413.43 and 5,418.65 resistance levels and was within about 20 points of a potential break to the upside of 5,644.05, with 5,449.67 seen as paramount.
DATA BOOST
Traders said economic data was also helping boost risk appetite, as euro zone industrial production figures came in much stronger than expected in August.
In the UK, however, unemployment rose to its highest level since 1994.
"Economic data is, on aggregate, nowhere near as bad as anticipated," a trader at a U.S. investment bank said. "The significant downside risk is slowly being taken out of the market because it looks as if there is a concerted economic effort across the euro zone, so the 'black swan' negativity has ... been removed and given people a little more stability."
He said with hedge fund performance also being so poor, there could also be a little bit of an environment where they're forced to chase the market.
Man Group shed 5.6 percent after the hedge fund firm said its flagship AHL fund fell 5.5 percent last week.
Elsewhere, there were soothing words from Slovakia where lawmakers had overnight rejected a plan to bolster the European Financial Stability Facility (EFSF).
Despite the initial "no" vote, parties in Prime Minister Iveta Radicova's outgoing government will hold talks with the opposition to reach a quick agreement on ratifying a plan to strengthen the EFSF, a party spokesman said.
Slovakia is the only euro zone member yet to ratify the plan, which would give the EFSF bigger powers to fight the spreading debt crisis.
Banks, beaten down this year on worries over exposure to the euro zone crisis, rallied, with Barclays up 2.2 percent.
In a note, SocGen said it remains very upbeat on UK domestic banks, and reiterated "buy" recommendations on Royal Bank of Scotland, Lloyds Banking Group and Barclays, despite cutting target prices across the sector.
"Each has a high quality core business earning double-digit returns on equity, despite the macro backdrop, but the overall picture is marred by significant low return/high risk non-core assets," SocGen analysts said.
Meanwhile, engineers were boosted with IMI and Weir up 2.8 and 4 percent respectively as Berenberg Bank starts its coverage on both firms with a "buy" rating.
Ex-dividend factors knocked 2.70 points off the FTSE, with Capital Shopping Centres , Old Mutual , Smith & Nephew , Tesco , Wolseley , and WPP Group all losing their payout attractions.
On the macro economic front, in the United States the main focus will be on the release of minutes for the Sept. 20-21 FOMC meeting, due after the London close at 1800 GMT.
(20min delay)