Foreign earnings hopes help FTSE offset retail woe

* FTSE up 0.1 percent

* Gains capped by technical resistance

* Commodity stocks higher, investors hunt earnings growth

* Retailers wane as Mothercare isues profit warning

By David Brett

LONDON, March 31 (Reuters) – Commodities and tech stocks
lifted Britain’s top share index on Thursday, offsetting more
retail gloom as analysts urged investors to seek companies whose
earnings were boosted by foreign exposure.

London’s blue-chip index, which has risen in the past six
trading days, will find it hard to push further ahead with
upside momentum likely to be capped by technical resistance,
analysts said.

“On a more long term scale the 5,975 level remains the area
capping any gains on the upside, and has done since early in
March,” James Hughes, senior market analyst, at Alpari UK, said.

The FTSE 100 (.FTSE: Quote, Profile, Research) was up 3.42 points, or 0.1 percent, at
5,951.72 by 0925 GMT, having risen 0.3 percent on Wednesday.

The index has risen 6 percent from its 2011 low at 5,591.59
on March 15, rebounding from sharp falls after Japan’s March 11
earthquake, political trouble in the Arab world and European
debt worries.

Traders said energy (.FTNMX0530: Quote, Profile, Research) and mining (.FTNMX1770: Quote, Profile, Research)
stocks were being sought for their exposure to earnings growth
outside Britain.

“The overall general trend is that the FTSE is split in two,
with companies with largely foreign earnings driving the market
higher and the companies with largely UK-focussed businesses
struggling,” Andrew Gibson, head of research at Galvan said.

Miner Vedanta (VED.L: Quote, Profile, Research) rose 1.8 percent on hopes its deal for
Cairn India (CAIL.BO: Quote, Profile, Research) would soon be ratified, which analysts
said would be earnings accretive for Vedanta in the first year.

The Economic Times of India reported the London-listed
metals and mining major has moved closer to acquiring control of
Cairn India, with capital market regulator Sebi clearing
subsidiary Sesa Goa’s open offer for shareholders of the Indian
oil and gas explorer.

Goldman Sachs, meanwhile, urged investors to look for growth
in emerging markets. “We believe that the growth/inflation
balance should improve in emerging markets. The early part of
the tightening cycle is over in emerging market and the growth
momentum is likely to accelerate for the rest of the year.”

RETAILING GLOOM

Mothercare (MTC.L: Quote, Profile, Research) slid 9.5 percent after the mother and
baby products retailer and wholesaler said profit from British
retail operations will be under significant pressure in 2011/12.

That followed a profit warning from Dixons (DXNS.L: Quote, Profile, Research) on
Wednesday, and an update from Swedish budget clothing retailer
Hennes & Mauritz (HMb.ST: Quote, Profile, Research), which undershot expectations for
first quarter on Thursday.

Fashion retailer Next (NXT.L: Quote, Profile, Research) and Kingfisher (KGF.L: Quote, Profile, Research),
Europe’s biggest home improvement retailer, each fell 1.1
percent.

International Power (IPR.L: Quote, Profile, Research) topped the FTSE 100 loser board,
off 1.6 percent after JPMorgan lowered its target price for the
utility, citing the risk of consensus downgrades and limited
newsflow.

Banks (.FTNMX8350: Quote, Profile, Research) were lower as traders cited their
exposure to a sluggish domestic economy and with uncertainty
over Europe’s debt problems weighing on sentiment ahead of the
results of Irish banking stress tests and a structural review.

Vodafone (VOD.L: Quote, Profile, Research), the world’s largest mobile operator by
revenue, shed 0.9 percent after saying it was paying $5 billion
to buy out Essar Group from its Indian joint venture.

On the upside, ARM Holdings (ARM.L: Quote, Profile, Research) added 1.1 percent, after
BofA Merrill Lynch upgraded its rating on the chip designer,
saying recent share price falls created a buying opportunity.

TUI Travel (TT.L: Quote, Profile, Research), Europe’s biggest tour operator, rose 1.6
percent after reporting summer bookings were ahead, with
customers booking alternative destinations following the unrest
in Egypt and Tunisia.
(Editing by Dan Lalor)

Foreign earnings hopes help FTSE offset retail woe