FTSE hits 4-week high as Sports Direct, BAE gain

By Atul Prakash

LONDON (Reuters) – Britain’s top share index hit a four-week high on Wednesday, with Sports Direct gaining on robust profits and BAE Systems rising after agreeing pricing for a long-standing Eurofighter deal.

Britain’s biggest sporting goods retailer (SPD.L) rose 5.7 percent to the top of the FTSE 100 gainer’s list after posting a 14.6 percent rise in profit in its Christmas quarter and saying it was confident of hitting its full-year target.

BAE Systems (BAES.L) gained 3.5 percent after the British defence contractor agreed pricing on the jet deal with Saudi Arabia, capping years of talks which had repeatedly forced it to defer earnings.

At 0850 GMT, the blue-chip FTSE 100 index (FSI:^UKX) was up 0.1 percent at to 6,800.08 points after hitting 6,810.48, its highest since late January. It has gained in 10 of 11 sessions and is up more than 6 percent from a low hit this month.

“A lot of investors want to get into the market,” Mike Franklin, chief investment strategist at Beaufort Securities, said.

“It boils down to confidence. If people feel interest rates aren’t about to go up then they can see they’ve got a bit of a free run … And inflation isn’t posing a problem either, that’s quite bullish too.”

Investors will scrutinise the minutes of the Bank of England’s latest policy meeting and unemployment data for December, both due at 0930 GMT.

UK rates are expected to remain low for some time to allow the economy to gain momentum. But investors will be keen to know when a rate hike cycle might kick in.

“Central banks appear to have retreated from aggressive forward guidance, making decision-making for investors tougher. Nonetheless …core central bank support mainly in the form of low interest rates looks unlikely to be removed anytime soon,” Keith Bowman, analyst at Hargreaves Lansdown, said.

“For now, the market looks ripe for true stock-picking.”

AstraZeneca (AZN.L), Barclays (BARC.L), Carnival (CCL.L), GlaxoSmithKline (GSK.L) and Reckitt Benckiser (RB.L) fell 0.7 to 2.9 percent mainly due to going “ex-dividend”, meaning investors will no longer qualify for the latest dividend payout.

(Additional reporting by Joshua Franklin; Editing by John Stonestreet)

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