Interest rate hopes boost FTSE
Fresh hopes that interest rates will stay on hold for the rest of this year gave London shares a sharp boost today.
After spending much of the first hour in the red, the FTSE 100 Index put on a spurt to stand 35.6 points ahead at 4770.1 by mid-morning.
Traders took heart from figures from the National Association of Estate Agents (NAEA) showing that the average property price in the UK fell 1.6%, its fifth consecutive monthly fall.
House prices are now on average 6.05% higher than they were this time last year – the lowest annual rate of change seen since the property boom began, the NAEA said.
David Fineberg of City stockbroker deal4free.com said: “The fear of another interest rate rise this side of Christmas seems to have cooled.”
The Dow Jones Industrial Average ended yesterday just below its opening mark as traders showed caution ahead of the Federal Reserve’s decision on interest rates.
The Fed ended up doing as expected and raising rates by a quarter point to 2%, although higher oil prices offset market relief about the decision.
However, the price of a barrel of US light crude was back on the slide today, standing at just over 48 US dollars in morning futures trading.
In London, insurer Royal & Sun Alliance was nearly 4% or 3p down at 75.5p despite reporting a substantial rise in nine monthly operating profits to £453m (€647.5m).
However, rival Prudential was 1% or 5.5p up at 424p after reporting a 92% take-up for its controversial rights issue.
BT was second in the Footsie risers with a 5.25p jump to 198.75p after saying rising demand for broadband had helped it to its fastest underlying revenues growth in nearly three years.
Elsewhere, Punch Taverns lost its earlier froth despite reporting “excellent” pre-tax profits before one-off items of £156m (223m) in the year to August 21 against £113m (€161.5m) previously. The pubs group was 1.25p down at 573.75p.
