FTSE 100 recovers, driven by defensives, as trade nerves ebb


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    * FTSE 100 up 0.5 pct
    * Defensive consumer, healthcare stocks drive gains
    * Sky rises after Comcast counter-bid
    * Paddy Power Betfair rises on World Cup result relief
    * Asos slides after sales growth miss

    By Helen Reid
    LONDON, July 12 (Reuters) - British shares bounced back on
Thursday, driven by financial and consumer stocks, as investor
worries eased and another bid for pay-TV firm Sky boosted its
    The FTSE 100  .FTSE  rose 0.5 percent, recovering from
Wednesday's drop after the release of further U.S. tariff plans,
as attention shifted to an earnings season expected to deliver
solid growth.
    Index gains were driven by financials, consumer stocks and
Sky, which rose after the latest bid in an ongoing battle
between Comcast and Twenty-First Century Fox to acquire it.
    Sky  SKYB.L  gained 1.8 percent after Comcast made a 14.75
pound per share counter-bid, exceeding a Twenty-First Century
Fox offer. The gains pushed the pay-TV stock to its highest
since the dotcom bubble.
    "While a counter-bid is possible, we do not view Sky at 15
pounds as an attractive proposition and view the bidding war as
lacking sufficient momentum to support Sky above its current
price (3% above the leading bid)," said Macquarie analysts,
downgrading the stock to "neutral". 
    The FTSE 100 outperformed European peers thanks in part to
its weighting to "defensive" sectors like consumer staples and
healthcare, which have strong cash flows and big payouts and
which investors turn in times of uncertainty. 
    Tobacco companies British American Tobacco  BATS.L  and
Imperial Brands  IMB.L  and pharma stocks AstraZeneca  AZN.L 
and GSK  GSK.L  were among the top boosts to the index. 
    Bookmaker Paddy Power Betfair  PPB.I  rose 3.4 percent to
the top of the FTSE 100, with traders citing relief after
England was knocked out of the World Cup by Croatia. 
    Oddschecker estimated bookmakers could lose 100 million
pounds if England won the World Cup.
    Paddy Power peer GVC  GVC.L  also gained 1.2 percent. 
    Among smaller stocks, Asos  ASOS.L  shares sank 11 percent
after the online fashion retailer missed forecasts for sales
growth in its latest trading period and said full-year growth
would likely be at the lower end of its guidance. urn:newsml:reuters.com:*:nL8N1U8111
    "The key disappointment is EU, where revenue growth slowed
to 23 percent in constant currency," said Berenberg analysts.
"UK performance remained very strong, which is positive ...
given this is ASOS' most mature and strongest market."
    Computacenter  CCC.L  shares jumped 6.3 percent to the top
of the FTSE mid-caps index after the IT services firm said it
expected full-year results to be "comfortably in excess" of its
prior forecasts.  urn:newsml:reuters.com:*:nL4N1U82NM
    Small-cap DFS Furniture  DFSD.L  fell as much as 10 percent
at the open after warning 2018 earnings would drop due to
disruptions to supplies and a UK heatwave. The stock pared
losses to trade down 4.3 percent by mid-morning. 
    Overall analysts have been upgrading their earnings
expectations for the FTSE 100 in recent weeks, a go,od omen for
companies' performance though the upward revisions also set a
higher hurdle for earnings to beat.

FTSE 100 earnings revisions    https://reut.rs/2NJ3Tr2
 (Reporting by Helen Reid, editing by Larry King)
 ((Helen.Reid@thomsonreuters.com; +44 20 7542 0402;))
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 Market digest:       .AD.L           Top 10 by vol:      .AV.L  
 Top price gainers:   .NG.L           Top % gainers:      .PG.L  
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