By Alistair Smout
LONDON (Reuters) – The top share index edged up on Wednesday after five straight sessions of falls, halting a recent pullback due to concerns over the health of the global economy after the index managed to hold above a key support level.
Although the FTSE 100 fell early on, it bounced back up after testing support at 6,422, managing to hold above four-month lows.
Volatility on the index also remained subdued after falling from seven-month highs the previous day, suggesting investors’ concerns are easing.
The recent falls in the FTSE – and rise in volatility – have come as concerns over U.S. growth compound fears over the resilience of emerging market economies, and traders said it was too early to know whether the index would hold its gains on Wednesday.
The FTSE 100 was up 23.39 points, or 0.4 percent, at 6,472.66 at 0851 GMT, although it remained within recent ranges, stuck below the intraday high hit in the previous session.
“Any move towards 6,400 is attracting some buying, (but) I’d want that area to hold for the week before I’d be sitting a little more comfortable on the long side,” said Will Hedden, sales trader at IG. He added that investors were cautious ahead of a European Central Bank meeting on Thursday and U.S. jobs numbers on Friday.
“If you did well last year – which most equity investors did – then I don’t see why you need to rush things at the moment.”
The index gained 14.4 percent last year, although emerging market turmoil has seen it lose 4.1 percent so far in 2014.
Leading gainers was RSA, up 4.6 percent in heavy volume after analysts and investors welcomed the insurer’s move to name former Royal Bank of Scotland boss Stephen Hester as its new chief executive.
“We view the appointment of Stephen Hester, a proven CEO with a track record of tackling challenging restructuring stories, as clearly shifting the risk/reward of the RSA stock,” analysts Barclays said in a note, upgrading the stock to “equal weight” from “underweight”.
The broader financial sector, however, which includes insurers, banks and asset managers, was mixed after Hargreaves Lansdown dropped 5.3 percent after results.
Traders cited a change in fee structure, a falling interest margin and the stock’s good recent run as behind the falls, with the update otherwise showing good client growth.
Hargreaves Lansdown is up over 110 percent since the beginning of 2013.
(Additional reporting by Sudip Kar-Gupta; Editing by Hugh Lawson)
- Market Movers
- Investment & Company Information
- FTSE 100