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FTSE steadies near 3-week highs; Boohoo jumps

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FTSE steadies near 3-week highs; Boohoo jumps
FILE PHOTO: A red London bus passes the Stock Exchange in London, Britain, February 9, 2011. REUTERS/Luke MacGregor/File Photo   -   Copyright  Luke MacGregor(Reuters)
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LONDON (Reuters) – Britain’s top stock index held near a three-week high on Wednesday as investors took profits into a recent rally in oil majors after crude prices hit a four-year high, while retailer Boohoo <BOOH.L> jumped after a strong set of earnings.

The FTSE 100 <.FTSE> was broadly flat at 0840 GMT, as European markets lacked a clear direction ahead of a widely expected rate hike from the U.S. Federal Reserve later on Wednesday.

Boohoo <BOOH.L> shares jumped 9 percent after the company raised its full-year sales forecast and first half profit increased 22 percent.

Connor Campbell, analyst at Spreadex, said a decline in mining stocks and profit taking in oil majors prevented the FTSE from making substantial gains above the 7,500 points mark.

Miners Randgold Resources <RRS.L> and Fresnillo <FRES.L> were the leading FTSE losers, both down more than 2 percent.

Concerns over the progress of Brexit negotiations dogged sentiment with British carmakers triggering some contingency plans by certifying models in Europe.

British stocks, however, remained supported among value-hunters because of their relatively cheap valuations compared to other major equity markets.

At around 4 percent, Britain offers a higher dividend yield than markets such as Europe and the United States.

On a valuation basis, the 12-month forward price-earnings multiple is 13 percent below global equities while the price-to-book ratio for the index is about a fifth below its long term average, according to Thomson Reuters data.

“These valuations chime with positioning data that show the UK to be somewhat of a consensus underweight,” said Mark Richards, a global multi-asset strategist at JP Morgan Asset Management in London.

As few as 630 UK-based finance jobs have been shifted or created overseas with just six months to go before Brexit, a far lower total than banks said could move after Britain’s surprise vote to leave the European Union, according to a Reuters survey.

(Reporting by Saikat Chatterjee; Editing by Toby Chopra)

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