FTSE gets back on its feet after four-week losing streak

Reuters
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By Kit Rees

LONDON (Reuters) - The UK's top share index closed higher on Friday and ended its first positive week since the middle of January.

The blue-chip FTSE 100 (.FTSE) index closed up 0.83 percent at 7,294.95 points, its highest level in one week. Mid caps (.FTMC) rose 0.7 percent.

Shares in financials and consumer staples, a sector which typically pays high dividends, added the most points to the index.

Consumer staples and utilities had come under pressure from rising bond yields, which can curb demand for their dividend income.

Among individual risers, Segro gainned 6.5 percent after the property group beat consensus expectations in its results for 2017.

"A solid report card, with attractive fundamentals and an outlook which are sure to maintain interest in what is perhaps the more conservative end of a steady-eddy sector," Mike van Dulken, head of research at Accendo Markets, said in a note.

Standard Life Aberdeen (SLA.L) recovered some of yesterday's losses, up 1.2 percent on the back of an upgrade from broker Bernstein to "overweight".

The insurer and asset manager's shares dropped 7.5 percent on Thursday after its biggest client, Lloyds (LLOY.L), served notice it would terminate its asset management mandate with the firm.

Bernstein analysts, however, said that the weakness in Standard Life Aberdeen's shares, which are down nearly 16.5 percent this year, was an "attractive opportunity".

"We think that if the rest of the business looks OK, and management provides investors comfort that it could shed some cost related to SW assets, the shares could get back on track after this sharp sell-off," Bernstein analysts said in a note, looking ahead to SLA's full-year results due later this month.

The FTSE 100 broke a four-week losing streak, fuelled by concern over rising bond yields, higher inflation and the prospect of central banks raising interest rates faster than expected.

In the UK, data on Tuesday showed inflation unexpectedly held near its highest level in almost six years in January, increasing the likelihood of a rate hike in May.

The possibility of higher rates can make equities less attractive to some investors than bonds.

For the time being, though, company earnings remain at the forefront of investors' minds.

"We've seen a massive over-sell in the market, and I would expect at least a short-term recovery, mainly due to banks reporting next week, which we expect will be good numbers," said

Jamie Meyer, advisory investment manager at Ocean Capital Group.

(Additional reporting by Julien Ponthus,; editing by Larry King)

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