Miners lead recovery by UK stocks

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Britain's top shares moved higher on Thursday after sharp falls in the previous session as investors sought out some bargains, with earnings news mixed.

Miners led the bounce back after falling sharply on Wednesday, helped by a recovery from two-month lows by copper prices.

At 11:12 SA time, the FTSE 100 index was up 22.01 points, or 0.4 percent, at 5,813.64, having dropped 1.6 percent on Wednesday as concerns over growth in Europe and the United States swamped initial relief that the US presidential election had been settled quickly.

“You've had a bit of a run up in anticipation of the Obama win, and now you've had a run down again. I think it's just part and parcel of the volatility that's brought about by uncertainty, and I think it's likely to continue over the next few days,” Michael Hewson, senior markets analyst at CMC Markets, said.

Another big batch of mixed corporate earnings news provided the main blue chip drivers, with almost 10 percent of the FTSE 100 index reporting results on Thursday.

Weakness in real estate stocks was the main drag. The sector was weighed by falls from Land Securities, down 0.9 percent after lacklustre first-half results, with net asset value per share up 0.1 percent.

Tate & Lyle was the biggest FTSE 100 faller, off 2.3 percent as the sweeteners and starches maker reported only a slight rise in first-half earnings, reflecting the cost of re-opening a factory and tough trading in Europe.

Volume in Tate was the biggest of the FTSE 100 stocks, at almost 75 percent of its 90-day daily average in the first hour of trading, with overall index volume at 12 percent.

Food retailer WM Morrison was also weak after its latest results disappointed, shedding 1.4 percent.

Britain's No. 4 grocer said an underlying sales decline worsened in its third quarter with the group missing out on the growth of larger rivals.

Morrison's poor performance though gave a boost to its rivals, with Tesco “I think what's happening is that there's divergence occurring in the sector; Tesco is doing better, Morrisons is doing worse, and I think the recognition is that Tesco slowly but surely is turning the UK supertanker around,” said Philip Dorgan, analyst at Panmure Gordon.

Meanwhile. well-received earnings news supported insurer Aviva, fund manager Schroders, and publisher Reed Elsevier, ahead 1.0 percent to 1.5 percent.

48 percent of European companies have so far missed expectations in the current quarter, according to data from Thomson Reuters Starmine, although analysts have raised their expectations for the next quarter on average by 1 percent for those companies that have reported.

CENTRAL BANKS EYED

Aside from the earnings flow, investors looked for direction later on Thursday from the latest Bank of England (BoE) and European Central Bank (ECB) rate-setting meetings.

The Bank of England is expected to make no change to record-low interest rates or its current bond-buying quantitative easing programme when the outcome of its latest Monetary Policy Committee meeting is revealed at 14:00 SA time.

Similarly, the European Central Bank is expected to keep its monetary policy unchanged when the outcome of its latest Council meeting is unveiled at 14:45 SA time.

“While we see no changes from the central banks this time, investors will still be keen to hear anything they have to say, particularly from ECB boss Mario Draghi,” said Andrew Crook, senior trader at Sucden Financial Private Clients. - Reuters


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