Britain's FTSE edges higher, tests 5,700

Britain's leading share index edged higher on Thursday, testing the psychologically important 5,700 level for only the second time since early May thanks to a strong performance by banks and miners.

A solid start to the second quarter earnings season around the globe helped support sentiment.

“We are just cruising along and waiting for more results,” said Richard Curr, head of dealing at Prime View.

“Most of the mining stocks are pushing a bit higher ... and the US results last night were slightly positive.”

By 13:34 SA time, the FTSE 100 was up 19.57 points, or 0.3 percent at 5,705.3, trading in weak volume of about 20 percent of its 90-day daily average half way through the session.

The FTSE crossed above the 5,700 mark for the first time in two weeks and for only the second time since early May, but struggled to make further headway.

“It has been in this upper-sloping bearish channel since the beginning of June ... What is important is that it stays within the channel as once the price falls below the lower limit and we get a few negative days, it could be a trigger for a major sell-off,” said Dmytro Bondar, a technical analyst at RBS.

Burberry, up 3.6 percent, was the biggest gainer of the index after French luxury brand Hermes reported 13.4 percent sales growth at constant sales for the second quarter.

“The Hermes numbers are giving Burberry a boost today, with their second quarter sales a bit above forecasts, and the French firm's CEO saying it sees no slowdown in demand in China. That country is the key to growth in the luxury market, so Burberry is very reliant on its health,” said a London-based trader.

Among the sectors, banks fared well, adding about 6 points to the index, led by gains in heavyweight HSBC , up 0.8 percent and recovering recent losses.

Miners also contributed a similar amount to the UK benchmark, cheered by stronger metal prices.

On the downside, Kingfisher, Europe's biggest home improvement retailer, shed 1.5 percent trading at over 80 percent of its 90-day daily average volume.

The company was among the FTSE's worst performers after it reported flat like-for-like sales in the second quarter, hurt by stormy weather in Britain and France.

Lower than expected British retail sales data for June added to the gloom, hit by low fuel sales and bad weather weighing on demand for barbecue food, the Office for National Statistics said. - Reuters