UK stocks : FTSE 100 ends up 0.3 pct

Nov 14 2012, 04:19 IST
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SummaryBritain's FTSE 100 share index closed up on Tuesday.

UK stock closing: Britain's FTSE 100 share index closed up on Tuesday, recovering from an earlier two-month low in late trade on renewed hopes that Spain will ask for a bailout, a move which is seen as an essential step towards solving the euro zone crisis.

Spanish bond yields fell and its main bourse index rallied on the expectations that Spain will make the formal request for help which is needed to start the European Central Bank's sovereign bond-buying rescue plan. However, there seemed to be no fresh news behind the shift in market sentiment, with traders saying that thin volumes exaggerated the moves.

There is rumour that Spain is getting its bailout, said Steve Larkins, head of sales trading at Seymour Pierce. They've got to do something, Europe has got to sort itself out.

The FTSE 100 finished up 18.98 points, or 0.3 percent, at 5,786.25, rebounding off a two-month intra-day of 5,710.99 points and climbing back above the key technical support level of the 200-day moving average around 5,729.19.

Despite being outside of the euro zone Britain has been hit hard by the crisis due to close trade ties and UK banks which have a direct exposure to the euro zone through holdings of sovereign debt reversed earlier losses, with the sector index gaining 1.1 percent.

Earlier Vodafone had unveiled a 5.9 billion-pound writedown on the value of its business in Spain and Italy and lowered its full-year outlook.

S hares in the mobile phone operator, the third biggest company in the FTSE 100, closed down 2 .5 percent i n m ore than three-ti mes the 90 -day av erage daily volume.

We were looking at some short positions in Vodafone, very short-term, said Jonathan Roy, sales trader at Prime Markets.

On the flip side, ITV was the biggest gainer on the FTSE 100, adding 9 percent after the broadcaster said its net advertising revenue for the year will outperform the wider television market.

You had the classic contrast: ITV, which we recommended as a 'buy' last night, looks very impressive and at the same time you've got Vodafone breaking down, and that's in a macro environment which is still very clouded and very troubled, so stock-specific risk is very high. said Tim Parker, technical analyst at Westhouse Securities.

We have lost momentum in the last couple of months (on the FTSE 100). We are in a sideways trading range of 5,950 to 5,700 points ... So it's watch and wait at the moment. If we get a breach of 5,700, then you could argue that there is a series of lower highs and lower lows that could be the beginning of a new downtrend and 5,500 would be the target support. ($1=0.6302 British pounds)

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