Strong Unilever earnings fuel gains in UK shares

* FTSE 100 index adds 0.1 percent, stalls at 6,200 level

* Unilever hits all-time peak after full-year results

* Takeover chatter fuels gain in United Utilities

* TUI Travel drops as German parent dashes takeover hopes

By Jon Hopkins

LONDON, Jan 23 (Reuters) - Strong earnings from household

goods firm Unilever drove gains in Britain's top share index on

Wednesday, with the numbers boding well for the nascent

full-year results season.

Unilever shares jumped to a record high, alone

providing almost 3 points of the FTSE 100 index's gains with a

2.3 percent rise in strong early volume of almost half its

90-day daily average in the first hour of trade.

The global consumer goods company earlier reported

underlying sales growth of 6.9 percent or 2012, beating

forecasts of 6.5 percent, propelled by double-digit growth in

emerging markets.

"Unilever looks to have moved from a recovery play to a core

portfolio holding. Exposure to the Emerging Markets remains

enticing, cashflow and the resulting dividend payment still

attractive, while its defensive attributes continue to appeal,"

Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers

said.

At 0916 GMT, the FTSE 100 index was up 7.85 points,

or 0.1 percent, at 6,187.02 points, having reached a 2013 peak

at 6,199.59 in early deals. The blue chip index closed flat on

Tuesday, weighed by falls in financials and mining stocks.

"Investors have banished thoughts of an imminent correction

and are back out in force this morning thanks to more positive

results," Mike McCudden, Head of Derivatives at stockbroker

Interactive Investor said.

"Furthermore, with strong signals that we will see a bill

from the U.S. House of Representatives granting a four month

extension to the debt deadline, investors are happy to ride the

current wave of confidence for a while longer."

Republican leaders in the House signalled on Wednesday that

they would aim to pass a bill to extend the U.S. debt limit. The

White House said this would remove uncertainty about the issue.

The Standard & Poor's 500 index rose to a fresh

five-year closing high on Wall Street on Tuesday on the debt

ceiling news, also supported by some positive earnings reports.

Back in London, BHP Billiton also lent strength to

the blue chips, up 1.1 percent and providing around 2 points of

the FTSE's gains.

The global miner boosted its iron ore output by 3 percent in

the December quarter, as it races to supply more of the raw

material to Chinese steelmakers despite signs of a softening

market.

BHP's advance lifted the heavyweight mining sector

, while energy stocks also found gains

benefitting from a firmer crude price as well as some

underlying takeover talks.

BG Group extended Tuesday's gains, up 0.3 percent

amid rehashed speculation that BP was running the

slide-rule over the company, according to a Daily Mail report.

The Independent newspaper also picked up on the renewed bid

rumours and said BP, Royal Dutch Shell and Exxon Mobil

have all been thrown up as possible bargain hunters for

BG, together with buyers who may emerge from China.

BP was up 0.3 percent, and Royal Dutch shares were flat.

Among other takeover chatter, United Utilities added

1.7 percent, the most traded FTSE 100 stock reaching its 90-day

daily volume average in the first-hour of trade, on speculation

that a consortium of infrastructure funds were lining up a bid

of between 8 and 10 billion pounds for the multi-utility,

according to the Daily Telegraph market report.

The Financial Times however, pointed out that non-executive

director Sara Weller bought shares in United Utilities on

Tuesday, suggesting there is no real foundation to recent bid

gossip.

And a touch of takeover hopes knocked TUI Travel

shares 4.8percent lower, with its parent, German travel and

ourism group TUI AG saying it has no intention of

making an offer for the majority-owned British unit.

Among other FTSE 100 fallers, ex-dividend factors clipped

1.97 points off the index, with contractor caterer Compass Group

and utility Scottish & Southern Energy both

trading without entitlement to their latest payouts.

(Reporting by Jon Hopkins)

Source: http://news.yahoo.com/strong-unilever-earnings-fuel-gains-uk-shares-092924720--business.html

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