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Intertek outperforms as UK's FTSE rises to near 3-week high

Wed, 29th Oct 2014 17:07

* FTSE 100 closes up 0.8 pct at 6,453.87 points

* Expectations of dovish Fed support global equities

* Intertek buoyed by positive broker comments

* Capita slumps after missing out on contract

By Sudip Kar-Gupta

LONDON, Oct 29 (Reuters) - Britain's top equity index roseto its highest level in nearly three weeks on Wednesday asexpectations the U.S. Federal Reserve will signal it is in norush to raise interest rates buoyed stock markets.

Intertek was the top performer on the blue-chipFTSE 100 index following positive broker comments, withthe FTSE itself closing up by 0.8 percent at 6,453.87 points.

Shares in the company, which carries out tests andinspections to make sure that goods meet health and safetystandards, climbed 5.1 percent.

Traders attributed Intertek's rise to a decision byCitigroup to reiterate a "buy" rating on the stock, while JPMorgan also kept an "overweight" rating on the company aftergetting positive feedback from a meeting with its management.

"Intertek's meeting with JP Morgan last night left themimpressed," said Securequity sales trader Jawaid Afsar.

Supermarket retailer Tesco also rose 2.1 percent.Traders shrugged off news that Britain's Serious Fraud Officewas launching a probe into accounting errors at Tesco and boughtup the beaten-down shares, which have fallen nearly 50 percentsince the start of 2014.

"There is so much negative news already out there on Tesco,that an announcement such as the one by the Serious Fraud Officewill not be enough to prevent bargain hunters from coming in forthe stock," Beaufort Securities sales trader Basil Petridessaid.

However, business services company Capita slumped6.5 percent after it lost out to rivals, including Interserve, in a bid to help run the bulk of Britain'srehabilitation centres for low and medium-risk offenders.

EXPECTATIONS OF DOVISH FED

The U.S. central bank is expected to announce after a policymeeting that it is ending its bond purchases amid signs ofstrength in the U.S. economy, but it is also likely to reinforceits willingness to wait before raising interest rates after avolatile month in financial markets.

The FTSE 100 hit a peak of 6,904.86 points at the start ofSeptember, its highest since early 2000, but it then slumped to15-month lows in October as weak European economic data knockedback stock markets.

"We're seeing evidence that people are anticipating a moredovish Fed in response to the slowdown in the euro zone and thedisinflation that has been gripping many of the majoreconomies," said Alpari UK market analyst Craig Erlam. (Additional reporting by Alistair Smout and Tricia Wright;Editing by Susan Fenton and Emelia Sithole-Matarise)

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