Fund managers help FTSE 100 edge up again

THE FTSE 100 nudged into positive territory yesterday on a strong showing from asset managers following robust results from Hargreaves Lansdown, which outweighed declines in energy stocks.

The FTSE 100 closed up 12.58 points, or 0.2 per cent, at 6,295.34, having risen 0.6 per cent the previous session after suffering its sharpest one-day percentage drop in three months on Monday.

While choppy trade in recent days has raised questions over the FTSE 100's ability to sustain its recent strength - with the index on Wednesday having swung from 6,265 through 6,321 - strategists reckon more gains are likely.

“It's likely to see near-term consolidation because it's a bit overstretched, but fundamentally we're relatively constructive,” UBS strategist Nick Nelson said.

Hargreaves Lansdown jumped 11.2 per cent, grabbing the top spot on the blue-chip leaderboard after it unveiled hefty increases in first-half profit, sales and assets.

Major banks have been cutting trading staff and, in some cases, battling fallout from rate-rigging scandals. But while trading volumes are generally in decline, co-founder Peter Hargreaves said his firm was finding new clients at an unprecedented rate, boding well for the sector.

Blue-chip peers Schroders and Aberdeen Asset Management rose 2.9 per cent and 1.2 per cent respectively, and midcap Henderson climbed 2.4 per cent.

Heavyweight energy stocks fell, with traders citing profit-taking after gains in the previous session when both BP and BG Group posted results.

Barclays weighed in on both oil majors, trimming its target price for BG to 1,420p to reflect a lower level of LNG profitability, though reiterated its “overweight” recommendation. Its shares shed 0.6 per cent.

The bank was cautious on BP, off 0.6 per cent, on which it has an “underweight” rating, highlighting continued risks associated with remaining claims over the Gulf of Mexico oil spill.

Among commodity stocks, Kazakh mining group ENRC surged 9.1 per cent to 372p, boosted by the company's strong quarterly output and media talk that it could be a takeover target.

“The Q4 production report, while mixed does show good growth in production of saleable ferroalloys and ferrochrome, and this coupled with expectations of a strong 2013 as stated by chief Felix Vulis should at the very least underpin the stock at current levels,” Richard Curr, head of dealing at Prime Markets, said in a note.