Britain’s top share index edged up on Wednesday, helped by consumer goods group Reckitt Benckiser’s robust update, although traders said concerns over earnings would limit further moves higher.
The blue-chip FTSE 100 index closed up 0.1 percent, or 6.87 points higher, at 5,804.78 points, recovering slightly from a 1.4 percent fall on Tuesday.
Heavyweight stock Reckitt added the most points to the FTSE 100, with its shares rising 3.7 percent after Reckitt bucked the trend of companies posting weak results by reporting higher sales.
Reckitt has come in with some pretty good numbers, and that’s helped sentiment a little bit, said Franklin Templeton fund manager Colin Morton, who holds Reckitt shares in his portfolio.
ARM also buoyed the FTSE, topping the index’s leaderboard with a 5.6 percent rise as the chip designer continued its strong run after posting higher profits this week.
However, Morton said worries over weak company results and the faltering global economy meant he was favouring defensive stocks, such as utility or food companies seen as most resilient in a downturn, over cyclical equity sectors such as miners.
We seem to be pretty well supported from a liquidity point of view, but the negative is that over the last fortnight, we’ve generally seen some disappointing corporate earnings, he said.
NATIONAL EXPRESS SLUMPS
The FTSE 100 traded within a tight range on Wednesday of 47 points, and traders expressed reluctance over betting on bigger gains due to concerns over the difficult economic environment.
Transport group National Express slumped 12.6 percent, making it the worst-performing stock on the FTSE 250 mid-cap index, after warning that 2013 would be challenging for the company.
Further underscoring the tough climate, a Confederation of British Industry (CBI) survey also showed a surprise fall in British factory orders in October.
JN Financial senior trader Rick Jones said he would go ‘short’ on the FTSE – namely take out a bet on the market falling – from levels of 5,810 points down to 5,790 points, but would look to buy if it reached the 5,750 point level.
We would look to buy on the dips but sell at the top of the range, he said.
