Late rally lifts FTSE
A late rally today helped London’s leading shares index recover from Tuesday’s rout despite mixed signs about the health of the world’s biggest economy.
The FTSE 100 Index had been down 0.5% in early trading but a positive start on Wall Street dragged it out of the mire to close up 75.7 points at 5710.5, with banks and miners leading the surge.
The Dow Jones Industrial Average was 1% higher as the London market closed after record exports helped reduce the US trade deficit but a rise in unemployment benefits blurred the overall picture of the country’s economy.
London’s top flight is now almost back to levels seen before its 2% fall on Tuesday when it was hit by fears that Spain’s economy will struggle to return to growth and worries that the US recovery is slowing.
The pound was up against the dollar at 1.59 as the greenback weakened after a recent strong run. But sterling fell against the euro 1.21.
Royal Dutch Shell dragged the market lower in early trading amid jitters over the discovery of an oil sheen in the Gulf of Mexico, which drew comparisons with BP’s Deepwater Horizon disaster in 2010.
Shares had been down more than 4% but recovered to stand 0.5%, or 11p lower at 2174p, after it said it was confident it was not a cause of the leak.
BP was also lower, down 0.6p at 444.9p, but other blue-chip resources stocks were on the front foot due to hopes China will tomorrow report strong GDP figures.
Rio Tinto was up 150.5p at 3487p and silver miner Fresnillo was ahead 47p at 1615p.
Banks, which had been sold heavily on Tuesday, benefited from the rally, with Barclays up 5%, or 11.8p at 203.3p, and Lloyds ahead 1.3p at 31.9p.
Car and aviation parts supplier GKN topped the FTSE 100 Index risers board after Credit Suisse upgraded the stock and said the current price failed to take account of its reported move to buy Volvo’s aviation division.
Shares were up 6% or 11.8p to 203.3p.
Other risers included Olympics power supplier Aggreko, which climbed 67p to 2226p after an update confirmed a “very strong” first quarter.
In the FTSE 250 Index, shares in recruitment firm Hays jumped 9% after it surprised analysts with a strong third quarter performance and a forecast that full-year operating profits will be at the top of market hopes.
Shares were 7.3p higher at 88.5p.
But JD Sports Fashion moved in the opposite direction, declining 8p to 791p, after it reported a drop in profits and said it will take longer than expected to revive the outdoor retail business Blacks Leisure.
The biggest Footsie risers were GKN up 11.8p at 203.3p, Barclays ahead 11.4p at 223.5p, Rio Tinto up 150.5p at 3487p, and Lloyds ahead 1.3p at 31.9p.
The biggest Footsie fallers were Resolution down 2.1p at 248.5p, Royal Dutch Shell off 11p at 2174p, Centrica down 1.2p at 315.6p, and Smith & Nephew off 2p at 612.5p.
