FTSE continues recovery
London’s FTSE 100 Index continued its recovery today despite a weak start on Wall Street after results from Caterpillar disappointed.
The construction and off-road vehicle group made more than one billion dollars (£613 million) profit in its second quarter, but this was short of forecasts.
The FTSE 100 Index added 19.5 points to 5919.4 as investors hoped that the Brussels plan to bail out Greece for a second time has helped to contain Europe’s sovereign debt crisis for the timebeing.
The rise was despite a wobble for the banks after analysts said they were likely to take any write-downs for their exposure to Greek debt in the upcoming half-year results.
Barclays, which is exposed to the debt-laden countries in the Iberian peninsula, dropped back 2p to 237.9p after jumping 8% last night. Gains for Royal Bank of Scotland were also trimmed to 0.9p higher at 36.9p while Lloyds Banking Group fell 0.7p to 46.8p.
Insurer Aviva, which relies heavily on the economies of Spain and Italy, was still ahead and up by 3.3p to 424.3p, a rise of 1%.
Miners joined in the rally as Rio Tinto added 43p to 4419.5p and Vedanta Resources gained 22p to 1870p.
Other heavyweight stocks on the front foot included Vodafone after the mobile phone giant offset concerns about its southern European markets to post a 1.5% rise in quarterly service revenues.
It forecast profits in line with expectations and said it has been helped by further strong trading in emerging markets such as India and Turkey, as well as continued demand for smartphones and data services.
Shares lifted more than 1% or 2.1p to 163.4p.
Elsewhere, low-cost airline easyJet delivered a major boost to shareholders by forecasting full-year pre-tax profits of between £200m and £230m, compared with the City’s consensus forecast of £179m.
The update fuelled hopes for a higher-than-expected maiden dividend next year, causing its shares to rally 16% or 51.3p to 364p in the FTSE 250 Index.
Shares in interactive whiteboards and school software supplier RM fell 15% after it admitted that its results for the year to September were more than likely to be lower than expected.
It blamed tough market conditions in the UK and United States and said it would be difficult to predict its trading performance with any certainty until after the summer, the period when it generates most of its profit.
Shares slumped 21.9p to 122.1p.
