Broker upgrades help push shares higher in tourism and retail stocks on Thursday.
|||London - UK shares edged higher on Thursday as investors awaited the European Central Bank's latest policy decision, while several broker upgrades helped push shares higher in tourism and retail stocks.
Britain's FTSE 100 index was up 0.1 percent at 6,427.14 points by 09h44 GMT, underperforming the broader European market.
The European Central Bank is expected to ease policy further later on Thursday, delivering a cocktail of measures that could include a deposit rate cut and changes to its asset-buying programme.
Trade was quiet ahead of the decision, with little over 10 percent of the 90-day average volume traded with around two hours gone in the session.
Tourism-related stocks rallied, with Whitbread, Britain's biggest hotel and coffee shop operator, up 2.7 percent following a target price upgrade by broker Credit Suisse, which added the stock to its global and European focus lists.
Credit Suisse saw value in the company's shares despite them being at a 13 percent premium to the UK market.
Cruise operator Carnival and tour company TUI AG were both trading up 1.3 percent.
UK supermarkets and retailers were also in positive territory, with analysts citing the potential benefit of the upcoming Christmas period as lifting shares in grocers Morrison’s, Sainsbury’s and Tesco, all up between 1.1 to 1.9 percent.
“There should be some more retail action moving into the Christmas period, and I think that the whole sector could benefit from the year-end rally,” Ipek Ozkardeskaya, market analyst at London Capital Group, said.
Retailer Next benefited from an upgrade from Goldman Sachs as part of its reshuffle of retail stocks. Next's share price rallied 1.4 percent.
Mid-cap Debenhams however, Britain's second-largest department store chain, fell more than 6 percent after Goldman Sachs said its earnings growth outlook looked modest by European standards.
At the bottom of Britain's blue-chip index, mining stocks fell after copper prices declined to their lowest levels in a week on the back of a strengthening US dollar and weak demand growth in China.
The FTSE 350 Mining index extended the previous session's losses, down 1.6 percent, with shares in Anglo American, BHP Billiton, Antofagasta, Glencore and Rio Tinto all falling between 0.5 to 2.4 percent.
“I think (the sector) remains clearly under pressure... they're seeing their earnings tumbling away and they can't sustain dividends at current levels if their earnings are likely to remain down for any length of time,” Ian Forrest, investment research analyst at The Share Centre, said.
REUTERS
