Britain's top share index edged higher on Tuesday as investors took shelter from economic uncertainty in defensive pharmaceutical stocks while rising metal prices, including a record in gold, lifted miners.
The FTSE 100 index closed up 0.3 percent at 6,356.5, underperforming its European counterparts with the FTSEurofirst 300 index ending trade up 0.6 percent. Capping the upside, the Dow Jones Industrial Average turned lower as concerns about fallout from the housing slump on the economy's outlook weighed. Data showed pending sales of existing US homes slipped in November but were stronger than previously thought in October.
Miners were the top performers as gold surged to a record high. Rio Tinto, BHP Billiton, Anglo American, Lonmin and Kazakhmys were up between 1.6 and 3.7 percent. With fears over global growth prospects rising, investors also piled into pharmaceutical companies, a sector traditionally considered defensive but which underperformed in 2007.
GlaxoSmithKline was up 3 percent, AstraZeneca gained 3 percent and Shire rose 2.6 percent. Medical equipment maker Smith & Nephew rose 7.3 percent. "We are condemned to looking at a disappointing and poor housing market for a while. I think that's something that's a given now. And there's only one solution, continuous cuts in interest rates," said Mike Lenhoff, chief strategist at Brewin Dolphin.
Vodafone was among the biggest weighted gainer, up 1.9 percent, as Morgan Stanley lifted the company's price target and upgraded the its full-year 2008 and 2009 earnings-per-share forecasts. Traders said 2.5 percent gains in Standard Chartered was part of the defensive play because the bank is Asia-focused and emerging markets have avoided the worst of the fallout from the turmoil in Western credit markets.
The biggest percentage loser was Britain's Yell Group which fell more than 6 percent after UBS downgraded the stock to "sell" from "neutral" and reduced its price target. UK housebuilders also struggled after ABN Amro cut its rating on both Persimmon and Taylor Wimpey to "sell" from "hold". Persimmon fell 4.9 percent and Taylor Wimpey shed 4.8 percent.
Oil stocks also lost ground, even as oil prices halted a three-day slide to rise above $97 a barrel. Heavyweight BP was down 0.6 percent and Royal Dutch Shell shed 2.2 percent. Investors are already looking ahead to Thursday when the Bank of England is expected to leave interest rates steady at 5.5 percent, according to a Reuters poll.
Comments
Comments are closed.