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Britain's FTSE ticks higher, holds above 6,100

Jan 15 2013, 16:41 IST
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SummaryThe index ticked up after data showing British consumer price inflation held steady in December.

Britain's top share index was modestly higher on Tuesday, recovering from opening falls but staying below a 4-1/2 year peak, with investors seeking fresh impetus to continue the new year's strong rally.

The index ticked up after data showing British consumer price inflation held steady in December, at 2.7 percent for the third month running, while wholesale inflation rose less than forecast.

The data confirmed a benign inflationary environment and leaves room for possible further asset buying by the Bank of England to stimulate a moribund economy.

At 0950 GMT, the FTSE 100 index was down 2.86 points, or 0.05 percent at 6,105.00, having shed 0.2 percent on Monday after reaching its highest since mid-2008 early in the session. The index is up over 2 percent since the start of 2013.

"Although the index has been grinding higher since the first of the year, the rally seems a little laboured, suggesting short-covering or weak buying was driving the market higher," Autochartist analyst James A. Hyerczyk said.

"From 6,053.60 to 6,134.17, the FTSE rallied 80.57 points in four trading days. If the closing price reversal top at 6,134.17 is confirmed on Tuesday, then look for the start of a correction to at least 6,093.35 to 6,082.97 by Wednesday," Hyerczyk added.

Gains by miners provided the main strength for the blue chips, adding over 5 points to the index, as upbeat production news from Rio Tinto buoyed the sector after falls on Monday.

The global miner added 1.0 percent after it said it aims to boost iron ore output by 15 percent this year as resurgent Chinese demand drives a price recovery. Production in 2012 meanwhile climbed to 253 million tonnes, beating the firm's own guidance.

ENRC was also in demand, up 3.3 percent to extend gains made in the previous session following a Credit Suisse upgrade. The Daily Mail newspaper suggested the Kazakh-based miner had also risen on Monday on speculation it had turned down a bid approach from major shareholder Alijan Ibragimov.

BURBERRY BOOSTED

Burberry Group was the top blue chip gainer, up 4.0 percent as the British luxury brand posted a 9 percent rise in third-quarter underlying revenue. That prompted BofA Merrill Lynch to upgrade its rating to 'buy' from 'neutral', raise its earnings forecasts by up to 4 percent and highlight the potential for a share buyback.

"The key good news is the recovery of retail (sales) like-for-likes from 1 percent in the previous quarter to 6 percent

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