London - Britain's top-share index was steady on Friday, pinned back by a drop in BAE Systems but set for its best week since June after a well received policy shift from the US Federal Reserve.
The FTSE 100 is up 2.3 on the week so far, set to snap a six week losing streak and to post its best week since July, despite dipping slightly by 0.67 points on Friday to 6,584.03.
The weekly gain comes days after the Fed began to slow its open ended asset purchase programme but committed to low interest rates for longer.
Atif Latif, director of trading at Guardian Stockbrokers, said that despite the recent weekly falls, stocks on the FTSE looked attractively valued.
“The cyclical economic recovery is taking place and we see the market being able to withstand the easing of tapering and monetary policy, led by inflation remaining subdued, will allow equities to outperform from here on in,” he said.
On Friday, gains were held back by BAE Systems, the biggest faller on the index.
It was down 4 percent after the defence company said United Arab Emirates had quit talks to buy Eurofighter Typhoon aircraft, which analysts at JP Morgan describe as a “major blow”.
“The UAE contract... had largely been discounted in the share price since BAE's raised the prospect in June 2013. We thus see potential for the shares to fall 20-45p on this news,” JPMorgan said in a note.
BAE also said it had not yet reached a final agreement with Saudi Arabia over a jet deal.
The stock's fall took the broader index into marginally negative territory.
Cruise operator Carnival led gainers with a 2.5 percent rise after its full year results were well received.
The cruise firm built on a 5.5 percent surge in the afternoon on Thursday after results revealed lower costs and optimism over future demand.
Ahead of the “triple witching” expiry of contracts for stock index futures, stock index options and stock options, there was substantial open interest in both the right to buy and to sell the FTSE 100 at 6,600, suggesting there could be volatility around that level in mid-morning trade.
Despite the weekly gain, Nicolas Suiffet, technical analyst at Trading Central, said prospects for the index were not good unless it could break through the previous top of 6,819.85.
“The upward potential should be limited by the resistance area 6621/6668,” he said.
“As long as this area is not penetrated, the FTSE 100 index is likely to resume its down trend towards 6422 and 6316.” - Reuters