UK stocks : FTSEurofirst 300 up 1.2 pct

Feb 09 2013, 02:43 IST
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SummaryFTSEurofirst 300 closed up 13.82 points, or 1.2 percent, at 1,162.10.

A return to form by Europe's banks helped the continent's shares recover on Friday with data pointing to potentially stronger global growth driving demand for equities.

The FTSEurofirst 300 closed up 13.82 points, or 1.2 percent, at 1,162.10.

A narrowing trade deficit in the U.S. and data overnight showing growing demand for Chinese exports nurtured hope that the global economy will strengthen.

Meanwhile, European Union leaders ended a bout of uncertainty by reaching an agreement on the bloc's long-term spending plans after more than 24 hours of negotiations.

"The key drivers for the macro recovery in January and the subsequent equity rally appear to be holding and as a result we have seen a lot of the week's pullback eradicated," Adam Seagrave, equity Trader at Saxo Bank, said.

The euro zone blue chip index rose 1.3 percent, finding support around its 200-week moving average (MA) at 2,616. The index has not closed below its 200-week MA since mid-December.

The brightening outlook for the global economy helped lift demand for miners, which rose 1 percent, but it was the banks, up 2.8 percent, which were the main drivers.

French bank Credit Agricole gained 6.9 percent after brokerage Exane upgrades it to "outperform," citing the significant discount it trades at relative to peers.

Norwegian bank DNB rose 4.6 percent, building on a 7 percent gain in the previous session after having delivered on its dividend promise, after UBS, Nomura and Credit Suisse produced upgrades on the stock.

The sector as a whole regained most of the losses of the last four days but found resistance around it 14-day moving average of 175.75.

RESISTANCE

While the broader FTSEurofirst 300 finished the session strongly, the index fell for the second week in succession, edging further away from 2-year highs which is proving a tough resistance level.

"On a personal level if you are the man on the street would you looking to be buying into this move? It is a tough decision but if you believe in the macro data that we are seeing then things care coming together which will aid the recovery further," a London-based trader said.

Improving global data could help companies keep up with their recent reratings, which in terms of price-to-earnings ration (PE) of 12 times are now at post credit crises highs.

Heavyweight mobile telecoms firm Vodafone climbed 1.2 percent after BofA Merrill Lynch upgraded the company to "buy" from "neutral" noting consensus earnings downgrades are slowing and could potentially of a

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