FTSE hits 10-month high
London shares received a fresh boost today after it emerged two of Europe’s biggest economies were no longer in recession.
German and French output grew by 0.3% in the second quarter – the first quarter of growth since the beginning of 2008 – as investors clung to hopes for a similar recovery in the UK later in the year.
The FTSE 100 Index reached a new 10-month high – up 53 points to 4,769.8 by mid-morning – as prospects were also boosted by comments from the US Federal Reserve last night that the US economy was “levelling out”.
Miners were buoyed by the encouraging economic signals as Xstrata lifted 5% or 42.5p to 807p and Kazakhmys cheered 47.5p to 901.5p.
Other sectors to receive a shot in the arm included housebuilding after FTSE 250 Index firm Barratt Developments rose 13.1p at 233.5p and Taylor Wimpey climbed 1.79p at 40.33p, a rise of nearly 5%.
Prudential was the top flight’s biggest riser, up 8% or 38.2p to 516.5p, after the insurer posted better-than-expected half-year profits and bucked the trend in the sector by improving its dividend for shareholders by 5%.
Holidays company Thomas Cook was the leading blue-chip faller after bookings for the winter season got off to a slow start and the company formally dropped its target for operating profits of £480m (€560) by 2010. Shares slumped 6% or 11.6p to 218.4p.
Having made similar cautious comments in a trading update yesterday, rival TUI Travel avoided another sell-off today to climb 0.6p to 245.4p.
Car parts maker Tomkins gained 4% or 8.1p to 185.4p after it slumped to a first half loss but announced plans to step up cost cutting efforts. Fellow engineering firm GKN lifted 6.1p to 115.7p.
