Traders in the Square Mile had the Federal Reserve to thank for a buoyant end to the week.
The fresh round of US stimulus, unveiled after markets in London closed on Thursday, surpassed investor expectations and the FTSE 100 climbed 95.63 points to 5,915.55, the highest level since March. The mid-cap FTSE 250 also surged 269.59 to 12,116.12.
Mining shares dominated the blue-chip leaderboard, with the 10 biggest gainers all commodities groups, as traders anticipated that further stimulus would spur greater demand for metals. Kazakhmys, which climbed 93 – or 13.7pc – to 773p, topped the FTSE 100, while Vedanta Resources followed closely behind with an increase of 128½p to £10.90.
The Fed announcement also prompted broker Shore Capital, which expects $600bn (£369bn) of additional quantitative easing in the next 15 months, to recommend clients buy companies with high US sales exposure, such as Ashtead, up 4.2 at 334.8p.
However, the market’s unbridled optimism did not stop downbeat analyst notes from weighing on some stocks. Stagecoach slipped 0.1 to 290.9p as Citigroup cut its recommendation on the company to “neutral” from “buy”.
Virgin Rail, Stagecoach’s joint venture with Virgin Trains, lost the West Coast franchise, and the broker said it did not “see sufficient upside in non-rail businesses to support a materially higher valuation”.
Other companies also missed out on the risk-on rally. BSkyB slid 24 to 720p, the worst-performing blue-chip, as investors continued to digest the news from earlier in the week that BT Group, down 3.8 at 233p on profit-taking, had won English premiership rugby television rights. Pace dropped 17½ – or 9.7pc – to 162½p following a report its set-top boxes for YouView had been rejected by BT. Pace said that talks with BT over the YouView contract would have “no material impact” on its earnings.
Elsewhere, Daily Mail & General Trust shrugged off a downgrade to “sell” from “hold” on valuation grounds at Peel Hunt and finished the day in the green, closing up ½ at 493¼p.
Other companies also missed out on the risk-on rally. BSkyB slid 24 to 720p, the worst-performing blue-chip, as investors continued to digest the news from earlier in the week that BT Group, down 3.8 at 233p on profit-taking, had won English premiership rugby television rights. Pace dropped 17½ – or 9.7pc – to 162½p following a report its set-top boxes for YouView had been rejected by BT. Pace said that talks with BT over the YouView contract would have “no material impact” on its earnings.
Elsewhere, Daily Mail & General Trust shrugged off a downgrade to “sell” from “hold” on valuation grounds at Peel Hunt and finished the day in the green, closing up ½ at 493¼p.
No comments:
Post a Comment