FTSE edges up with focus on mixed retailers

LONDON -

The FTSE 100 edged up on Thursday as strength in Tesco, which beat sales expectations over the Christmas period, outweighed weakness in its competitors.

At 08:07 a.m. British time, the FTSE 100 <.FTSE> was up 6.79 points, or 0.1 percent, at 6,105.44, struggling to sustain a break through strong resistance a day after hitting its highest level since May 2008.

Miners <.FTNMX1770> pared back early gains, edging up a mere 0.1 percent despite data showing iron ore imports in China, the world's top metals consumer, hit a record high in December.

Tesco rose 2.4 percent after it posted its highest sales growth in three years, offering signs that a turnaround strategy is beginning to show results.

Its performance over Christmas 2011 prompted the firm's first profit warning in 20 years and a strategic re-think. But this time around Tesco seems to have regained its edge during the highly competitive festive season.

Marks & Spencer, meanwhile, fell 4.1 percent after reporting a steep drop in non-food sales in the Christmas quarter.

"People are going out of Marks and into Tesco," Basil Petrides, trader at Hartmann Capital, said.

"If you look at them historically, they've had 20 years of sustainable growth. Tesco has the best management of all the supermarket retailers in the UK," he said, adding that Tesco shares could rise back to the 400 pence level.

Tesco added 3.2 points to the index, outweighing falls in other retailers to bring the consumer staples into positive territory.

J Sainsbury <.SBRY> fell 1.2 percent, taking total falls since it reported that sales growth had fallen yesterday to 4.5 percent.

Tesco was only surpassed on the gainers board by Bunzl , upgraded by Numis after making its fifth acquisition in Brazil.

"We believe the acquisitions today will focus investor attention on the opportunities for acquired growth and we see the shares moving higher," said Numis analysts in a note. Bunzl gained 3.8 percent.

Mike van Dulken, head of research at Accendo Markets, said the broader UK market might struggle to post further gains until the earnings season was further under way.

"Normally, Chinese data like we've seen overnight would be a real shot in the arm, especially for the miners," he said.

"Up near resistance around the 6,100 level, (the data) maintained the sentiment from yesterday, but we haven't been able to push on."

(Additional reporting by Sudip Kar-Gupta and Jon Hopkins; Editing by John Stonestreet)