BRITAIN’S leading share index added 0.3 per cent yesterday, as support for defensive issues, and a modest early rally on Wall Street, offset weakness in heavyweight miners and banks.
At the close, the FTSE 100 index was up 16.54 points at 5,276.85, snapping a four-session losing streak, having earlier reached an intraday low for the year of 5,215.73.
“Many are hoping that this will mark a line in the sand under the recent decline ... A couple of days holding steady here could prove to be a sign that the selling is over and it is time to start looking for a run back up to the earlier January highs,” said David Jones, chief market strategist at IG Index.
Pharmaceutical stocks were the best blue-chip performers, wanted for their defensive attractions and helped by solid full-year results from Swiss peer Novartis, with GlaxoSmithKline, AstraZeneca and Shire putting on 1.5 to 1.6 per cent.
Other defensive issues were also in favour, with cigarette maker Imperial Tobacco up 2 per cent, household cleaning goods group Reckitt Benckiser adding 1.4 per cent and United Utilities up 1.1 per cent.
Food retailers were wanted too, with J Sainsbury, Tesco, and Wm Morrison up 0.7 to 1.3 per cent.
However, oil majors rallied after recent falls, although crude prices stayed weak, with BP, BG Group and Royal Dutch Shell up 0.5 to 1.5 per cent.
Among individual gainers, British Airways rose 0.6 per cent as Morgan Stanley lifted its stance on European airlines to “attractive” from “cautious” as it is more comfortable that passenger cargo and capacity trends will be favourable in 2010.
Mid cap airline easyJet climbed 2.4 per cent after the same broker upped its target price in its sector review.
US blue chips were higher in early trade, up 0.5 per cent by London’s close, helped by stronger-than-expected US consumer confidence data.
Miners were the main drag on sentiment for the FTSE 100 as metal prices declined on demand concerns over fears of possible tighter monetary policy in China.
Fresnillo, Kazakhmys, Randgold Resources, Xstrata, and Lonmin lost 1.5 to 2.3 per cent.
Rio Tinto and BHP Billiton dropped 1.1 and 1.0 per cent respectively, after EU regulators on Monday launched an investigation into whether a planned $116bn iron ore production joint venture between the two companies, criticised by steelmakers, will curb competition.
Britain crept out of recession in the fourth quarter of 2009 but only just and with a far weaker growth rate than expected, data showed, suggesting any monetary tightening remains a long way off.
Financials were out of favour with the GDP news, and were still impacted by last week’s proposals from US President Barack Obama to curb banks’ risk-taking ability.
Lloyds Banking Group, Royal Bank of Scotland and HSBC shed 0.2 to 2.3 per cent.