FTSE ekes out gains as WPP gets Publicis boost

LONDON: Britain's FTSE 100 edged higher in choppy trade early yesterday with WPP receiving a boost from French peer Publicis but broader gains were capped by continued worries over the US budget deficit and Greece's debt crisis.
By 0957 GMT, the FTSE 100 was up 12.48 points, or 0.2 percent, at 5,782.16.
Volumes were a paltry 7 percent of their already weak 90-day daily average, reflecting the unwillingness of investors to take up fresh positions in equities amid weak earnings and global macro economic uncertainty.
The index bounced off an intraday low on Friday, having probed the 200 day moving average level around 5,730 but the market continues to trade in a tight range of barely 20 points, amid.
"Greece has become a feature recently, although compared to a year ago overall it is a more positive space ... but the real problem is the US fiscal cliff and whether there is going to be gridlock or if it is going to be resolved," said Richard Hunter, head of equities at stockbroker Hargreaves Lansdown.
The outcome of talks over the fiscal cliff - a $ 600 billion package of tax increases and spending cuts that will take effect in January if there is no long-term pact to cut the budget deficit - is a major uncertainty for markets.
"It is difficult to see a rally into the year-end and unless the US politician decide to sort out the US fiscal cliff this side of Christmas it is difficult to see where another positive catalyst is coming from," he said.
There was little evidence that the appetite was there among investors to propel riskier assets, stocks that tend to outperform when economic condition improves, higher.
Miners shed 0.6 percent as weak GDP data from Japan, uncertainty over the euro zone and the looming US fiscal cliff took the sheen off slightly better trade data from China.
Platinum producer Anglo American fell 1.1 percent blighted by strikes in South Africa, which forced mining peer Lonmin to go ahead with a cash call to slash its debt and fund a recovery, after being hit by six weeks of strikes.
But it was defensively perceived stocks, companies that tend to outperform in times of economic uncertainty that led the gainers.
British American Tobacco rose 0.5 percent, while heavyweight telecoms firm Vodafone, liked for its dividend attractions, added 0.3 percent.
Car insurance firm Admiral, up 2.6 percent, continued its recent resurgence boosted by the firm's dividend yield of over 9 percent.
WPP RISES
FTSE 100 advertising firm WPP was among the top gainers, rising 2 percent after French peer Publicis PUBP.PA said on Sunday that demand for advertising rebounded in October.
Earnings have been capricious at best with 43 percent of European companies missing earnings expectations so far in the current quarter, according to Thomson Reuters Starmine data.
Aero electronics group Cobham fell 7.6 percent after it said it expected its revenues to fall due to increasing pressures on the defense budgets of the US. Industrial services provider Cape Plc slumped more than 30 percent after a profit warning.
JP Morgan said that while earnings growth forecasts for 2013 have started to nosedive it thinks there is much more to go.
"Our call remains for range trading at best into year end - "travel and arrive", to be followed by a break lower in Q1," JP Morgan said in a note.