FTSE bounces off six-week low

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FSTETrader1234 Reuters. A trader monitors the screen on a trading floor in London.

London - UK shares rose on Tuesday, rebounding off of a six-week closing low, after Kingfisher and easyJet posted updates that raised optimism about the outlook for corporate earnings this year.

Home improvements retailer Kingfisher jumped 6.3 percent as it said it would return about 200 million pounds ($330 million) to shareholders in the current year, after meeting forecasts with a 4.1 percent rise in 2013-14 profit.

It was followed on the FTSE 100 leaderboard by easyJet.

The budget airline upgraded its first-half outlook by 25 percent, helped by tight cost control and the popularity of its allocated seating programme, sending its shares 4.5 percent higher.

Plumbing supplies group Wolseley also gained after its corporate update, rising 3.3 percent as strength in its US, British and Nordic operations lifted its profit.

“Most of the figures out today seem to be broadly positive, with Wolseley, easyJet and Kingfisher all reading pretty well. There's a raft of good corporate figures which point to a good economic backdrop,” Joe Rundle, head of trading at ETX Capital, said.

They helped the FTSE 100 index advance 74.25 points, or 1.1 percent, to 6,594.64 points by 13:51 SA time.

Only five stocks on the index were in negative territory.

Royal Mail Group fell 1.7 percent after announcing 1,300 job cuts, with traders also highlighting light letter volumes.

“Royal Mail will be all over the headlines for the wrong reasons tomorrow (but) have made what I think is the right move in the longer term,” Rundle said.

Market gains lifted the FTSE away from its lowest close since February 5, although it remained around 4 percent shy of its 2014 peak hit in late January.

The stock market has suffered from concerns about developments in Ukraine, as the G7 warned Moscow of more sanctions should Russia destabilise its neighbour further.

Signs that China's growth is slowing has also dampened market sentiment, particularly mining stocks, but they rebounded on Tuesday on speculation China will act to support its economy after a survey showed manufacturing contracted in the first quarter.

Credit Suisse reduced its overweight on global equities, citing China as its “biggest global macro concern”, but said it should grow enough for equities to continue to look attractive.

“Only sub-5 percent GDP growth would lead us to underweight equities ... for now, we think that China has the policy power to avoid sub-5 percent GDP growth,” strategists at Credit Suisse said in a note. - Reuters



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