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Earlier, leaders condemned Israeli forces' 'barbaric' actions in Gaza but declined to approve punitive economic and political steps against the country
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Britain’s FTSE steadies in cautious trade, oil shares up
LONDON - Britain’s top stock index steadied in cautious trading on Tuesday, with concerns about global economic growth and the euro zone debt crisis prompting investors to buy defensive stocks, while energy stocks tracked higher oil prices.
At 0847 GMT, the FTSE 100 index was flat at 5,840.80 points after closing 0.2 percent down in the previous session. The UK oil and gas sector rose 0.3 percent as crude prices climbed 0.7 percent on escalating tensions surrounding Iran.
Pharma stocks, generally seen as defensive plays, were in demand as investors lacked conviction to place strong bets on equities. AstraZeneca and GlaxoSmithKline were up 0.2 percent and 0.4 percent respectively.
Investors traded cautiously after a media report said Germany’s central bank was getting lawyers to check the legality of the European Central Bank’s bond purchase plan. Any hurdle in the ECB’s plan to buy bonds could hamper its ability to help countries like Spain.
Recent poor economic numbers, including Monday’s data showing Germany’s Ifo index of business sentiment falling for a fifth month running, and a slowdown in top metals consumer China reminded investors about the risks ahead.
“We are surprised that there haven’t been further moves for stimulus in China in what is now an apparent slowdown in activity,” said Gerard Lane, strategist at Shore Capital.
“Any actions on this front would be taken positively, although further delays will again hamper miners and the overall market.”
The mining index was down 0.3 percent, with global miner Rio Tinto falling 0.5 percent and Xstrata dropping 0.6 percent.
The FTSE index has traded in a range since news this month of the European Central Bank’s plans to buy bonds of struggling countries to bring down their borrowing costs and the US Federal Reserve’s third round of monetary stimulus.
“Any rational investor might think they should be pressing the sell button hard considering all the negative news out there, but the recent action from central banks is keeping the sellers at bay,” Angus Campbell, head of market analysis at Capital Spreads, said.
“We are in a strange position where valuations are being held up artificially by central banks and as such any weakness in equities seems to be short-lived.”
However, analysts said investors’ confidence in the market remained fragile in the light of an uncertain economic outlook.
“Political and economic authorities have so far failed to engender much confidence in the outlook and companies are not investing for the future, but returning capital to shareholders,” Jeremy Batstone-Carr, head of private client research at Charles Stanley, said.
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