London midday: FTSE 100 lifted by Resolution, Reckitt and Vodafone

17th Jun 2013 11:22

The FTSE 100 was performing strongly on Monday morning as bargain hunters moved in to pick up stocks following the index's recent slump.Global markets have been extremely choppy over the last month since Federal Reserve Chairman Ben Bernanke suggested that the bank could begin 'taper' its quantitative easing (QE) programme if the economic recovery picks up. Since his comments on May 22nd, the FTSE 100 has dropped sharply and its technical outlook has "deteriorated significantly", according to analysts at Charles Stanley, resulting in a "decisive break through the medium-term uptrend (and 50-day moving average)"."As you might expect, this has left the FTSE looking relatively oversold: the 14-day Relative Strength Index has dropped to a reading of 36%, which represents the low end of the range that has been in place since November," they said.While the index rebounded strongly this morning, market sentiment still appears to be rather fragile following recent volatility. Investors are likely to remain cautious ahead of the Federal Open Market Committee (FOMC) meeting which concludes on Wednesday."The market this week will look to the Fed for direction over monetary policy and will no doubt hope rates are set to remain low and bond-buying easy," said Financial Trader David White from Spreadex."Given that the market has gone some way to price in the probability of a 'tapering', there could be room for a surprise to the upside if the comments are supportive, particularly for interest rate sensitive securities. But the Fed is likely to do what it usually does, namely reiterate what has been already stated."Resolution and Reckitt gain after broker commentsFinancial services giant Resolution was making decent gains this morning after JPMorgan Chase & Co raised its target price for the stock from 302p to 273p as part of its review of the UK life insurance sector. The broker said that the company is continuing to deliver cost savings and improving restrung which underpins its strong dividend yield of 7.6% against the sector at 4.0%. Nevertheless, the broker kept its 'neutral' rating on the stock, saying that it prefers Standard Life, St James's Place, Aviva and Phoenix (all rated 'overweight').Consumer products giant Reckitt Benckiser was a high riser this morning after Citigroup reiterated its 'buy' rating for the stock, saying that the shares are cheap. While the broker said it was a buyer of the company for the recovery of its core business, it also said that the pharmaceuticals division is "undervalued by the market".In contrast, Nomura has downgraded its rating for food ingredients and retail group Associated British Foods from 'neutral' to 'reduce', causing shares to fall early on. The broker said that the stock is too expensive now that the profit boom for Sugar and Primark over the past two years is no longer supported.Technology group Invensys saw its share price jump after Canaccord Genuity mulled the potential of a takeover by foreign investors. While the broker initiated coverage of Invensys with a 'hold' rating and 420p target price, it said that the business could be of interest to "some of the six process automation competitors or a strategic Chinese buyer".Vodafone was also lifted higher by M&A activity in the telecom sector after reports that AT&T is looking to buy Spanish group Telefonica.Oilfield services group Petrofac was in the red this morning on negative read-across from Italy after a profit warning from sector peer Saipem. The Milan-based firm warned of rising costs for projects in Algeria.FTSE 100 - RisersResolution Ltd. (RSL) 285.40p +3.74%Reckitt Benckiser Group (RB.) 4,701.00p +2.66%Aggreko (AGK) 1,770.00p +2.61%Vodafone Group (VOD) 184.70p +2.58%Experian (EXPN) 1,174.00p +2.35%Pearson (PSON) 1,208.00p +2.20%Standard Life (SL.) 372.00p +2.00%Weir Group (WEIR) 2,202.00p +1.85%Aberdeen Asset Management (ADN) 403.60p +1.84%Capita (CPI) 959.00p +1.80%FTSE 100 - FallersARM Holdings (ARM) 830.00p -3.71%Associated British Foods (ABF) 1,731.00p -2.86%Randgold Resources Ltd. (RRS) 4,838.00p -0.88%Evraz (EVR) 119.90p -0.74%Tullow Oil (TLW) 1,041.00p -0.67%Anglo American (AAL) 1,417.50p -0.60%Hammerson (HMSO) 505.50p -0.30%Eurasian Natural Resources Corp. (ENRC) 241.50p -0.25%British Sky Broadcasting Group (BSY) 785.50p -0.25%Whitbread (WTB) 2,912.00p -0.24%FTSE 250 - RisersCentamin (DI) (CEY) 39.01p +5.38%Thomas Cook Group (TCG) 120.40p +4.70%Morgan Advance Materials (MGAM) 278.20p +4.59%Petropavlovsk (POG) 144.60p +3.80%International Personal Finance (IPF) 497.50p +3.75%Ocado Group (OCDO) 306.50p +3.20%Intermediate Capital Group (ICP) 439.60p +3.19%Invensys (ISYS) 417.90p +3.08%New World Resources A Shares (NWR) 93.40p +2.92%Hikma Pharmaceuticals (HIK) 988.00p +2.92%FTSE 250 - FallersImagination Technologies Group (IMG) 303.00p -3.93%Dialight (DIA) 1,168.00p -3.47%Kenmare Resources (KMR) 28.93p -3.34%FirstGroup (FGP) 91.00p -2.88%African Barrick Gold (ABG) 132.10p -2.51%Hochschild Mining (HOC) 207.80p -1.98%Home Retail Group (HOME) 130.30p -1.88%Lonmin (LMI) 284.10p -1.29%Renishaw (RSW) 1,696.00p -1.22%Alent (ALNT) 335.60p -1.12%