Global outlook pushes FTSE higher
Improved confidence in the global economic recovery boosted commodity stocks today and pushed the FTSE 100 Index higher.
The Bank of Japan unexpectedly cut interest rates yesterday, supporting the view that other governments will act further to bolster an uncertain economic recovery.
The Footsie, which is at its best level since late April, was up 28 points at 5667, following a bumper session on Wall Street yesterday.
Better-than-expected figures from the US services sector saw the Dow Jones Industrial Average close nearly 2% higher last night.
The top flight benefited from another decent session for mining stocks after the improved recovery hopes lifted base metal prices and crude oil increased to around 83 US dollars a barrel.
Antofagasta was up 4% or 53p at 1322p, Xstrata gained 44.5p to 1284.5p and Kazakhmys advanced 51p to 1478p.
There was also a gain of 4% for British Airways, which added to the 6% rise seen yesterday after it posted better-than-expected traffic figures. Shares were up 9.5p at 264p.
BA’s rally was given further momentum by low-cost rival easyJet, which raised its profits forecast and said the cost of disruption to European airspace caused by the Iceland volcano was likely to be less than expected.
EasyJet shares topped the FTSE 250 Index risers board with a gain of 10%, or 38.5p to 425.4p.
Elsewhere in the index, shares in Dunelm soared after the homewares chain continued to defy forecasts with a surprise rise in like-for-like sales.
The firm, which has 106 stores under the Dunelm Mill name, reported growth of 2.1%, beating City expectations that its sales could fall by as much as 5%. Shares were up 7% or 26.3p at 431.5p.
Back in the top flight, shares in supermarket chain Sainsbury’s fell, despite better-than-expected sales figures for the second quarter.
The group, which was down 3.6p at 386.2p, posted like-for-like sales growth of 2.9%, helped by the success of its non-food offering, but was cautious over its outlook in the face of a “challenging” consumer environment.
Among the major Footsie losers were software group Autonomy Corporation, after it warned it will miss market expectations for its full-year revenue by around 3%, triggering a 16% or 294p drop in shares to 1558p.
TUI Travel also failed to hold on to gains triggered by yesterday’s strong summer trading update, after investment bank UBS downgraded the firm from buy to neutral. Shares slipped 5.6p to 220.3p.
