T OP SHARES steadied yesterday after their recent losses, as solid earnings from the likes of Johnson Matthey and robust US economic data offset concerns over the outlook for US monetary policy.
However, some traders felt there was scope for further falls in the market, which has been trending lower since late October.
The FTSE 100 ended up a quarter of a point at 6,681.33, having recovered from a session low of 6,643.47 and after losing ground in the previous two days. Volumes were light, at three quarters of the 90-day daily average.
The index is trading some two per cent below a five-month high of 6,819 hit on 30 October shaving its advance in 2013 to around 13 per cent.
“I think we are still in a sell-off,” Mike van Dulken, head of research at Accendo Markets, said. “The tick back up ... from the lows is nice to see but you’ve still got big resistance at 6,710.”
He said that, should support at 6,640 give way, the index could fall as far as mid-November lows of around 6,610.
Johnson Matthey, the world’s largest maker of catalysts to control car emissions, topped the FTSE 100 leader board, up 3.7 per cent, after unveiling a 13 per cent rise in first-half profit, helped by increased global production of cars and trucks.
“A strong set of numbers ... The outlook remains slightly cautious but notwithstanding any more negative news in this space, we expect to see some more earnings upgrades through the next couple of years,” said Atif Latif, director at Guardian Stockbrokers.
AstraZeneca also notched up solid gains, ahead 2.8 per cent, as Citi analyst Andrew Baum and colleagues highlighted the early-stage potential of its cancer drug pipeline in a research note, adding it might make sense for the drugmaker to acquire Actelion.
Sentiment yesterday was helped by data releases from the United States indicating stronger labour market conditions and subdued inflation pressures.
But the market’s progress was limited by minutes of the US Federal Reserve’s 29-30 October meeting showing bank officials felt they could start scaling back the asset purchase programme at one of its next few meetings if economic conditions warranted it.
The stimulus has proved a major driver for the UK benchmark index, which has risen around 20 per cent in the past year as investors have moved out of safe bonds and into higher-yielding assets, such as stocks.