Corporate optimism lifts FTSE, up for sixth session

By Simon Falush

LONDON (Reuters) – Banks and miners pushed Britain’s FTSE 100 (.FTSE: Quote, Profile, Research) higher on Wednesday, with investors focusing on an improving outlook for company earnings and with technical indicators pointing to further gains.

The FTSE 100 (.FTSE: Quote, Profile, Research) was 29.24 points, or 0.5 percent higher, at 5,961.41 by 1102 GMT. The index, which rose 0.5 percent on Tuesday, was up for its sixth consecutive session, its longest winning streak since August.

Miners and banks, which tend to perform well when appetite for risk increases, provided the bulk of the gains.

Vedanta Resources (VED.L: Quote, Profile, Research) added 5.3 percent, the top gainer, with traders citing a note from Morgan Stanley saying the India-focused miner has a 64 percent upside.

Global miner Rio Tinto (RIO.L: Quote, Profile, Research) gained 1.9 percent while HSBC (HSBA.L: Quote, Profile, Research), Europe’s largest bank, added 0.7 percent.

Randgold Resources (RRS.L: Quote, Profile, Research) bucked the trend, slipping 0.4 percent after Societe Generale started coverage of the precious metals miner with a “sell” rating.

The FTSE 100 saw a sharp rebound last week from falls earlier in the month prompted by worries over the euro zone debt crisis, political turmoil in the Arab world and the earthquake in Japan.

“The updates companies have been giving investors since the oil price picked up have indicated that prices can be passed on and that demand is holding up,” Colin McLean, managing director at the 650 million pound ($1.04 billion) Scottish Value Management in Edinburgh.

He said industrials, tech stocks and chemicals producers all look well-placed.

IMI (IMI.L: Quote, Profile, Research) rose 2.4 percent, among the top performers, after RBC Capital Markets, in a broader upbeat note on industrials, selected the engineer as its “top pick.”

BID TALK

Centrica (CNA.L: Quote, Profile, Research) was among the top gainers, up 2.9 percent on strong volume with traders citing talk that Spanish peer Iberdola (IBE.MC: Quote, Profile, Research) was set to make a bid.

Traders also cited talk of bid interest in fashion group Burberry (BRBY.L: Quote, Profile, Research), which added 2.6 percent.

Technical analysts said the index looked set to retest the 6,000 level, with CMC Markets analyst Michael Hewson saying the March high of around 6,040 could be reached soon as long as the index closed above its 55 day moving average at 5,945.

The index is above its 50-day moving average for the first time since March 8.

However, reminding investors that companies exposed to the domestic economy faced tough times ahead, midcap electronics chain Dixons Retail (DXNS.L: Quote, Profile, Research) slid 11 percent. Marks & Spencer (MKS.L: Quote, Profile, Research) slid 2.7 percent.

British retail sales growth picked up unexpectedly in March, but the underlying trend for sales remained weak, a Confederation of British Industry survey found.

With the market focused on Friday’s U.S. March non-farm payrolls report, March’s Challenger Layoffs numbers and ADP National Employment survey, due at 1130 GMT and 1215 GMT respectively, will give an idea of the jobs situation across the Atlantic.

Ex-dividend factors knocked 4.4 points off the FTSE 100 index, with Anglo American (AAL.L: Quote, Profile, Research), British Land (BLND.L: Quote, Profile, Research), British Sky Broadcasting (BSY.L: Quote, Profile, Research), Eurasian Natural Resources (ENRC.L: Quote, Profile, Research), Prudential (PRU.L: Quote, Profile, Research) and Smiths Group (SMIN.L: Quote, Profile, Research) all trading without their payout attractions.

(Editing by Dan Lalor)

($1 = 0.6225 pound)

Corporate optimism lifts FTSE, up for sixth session