Interest rate buzz lifts FTSE
The London market shook off opening losses today as a surprise fall in inflation lifted blue-chips.
The FTSE 100 Index was almost 60 points lower earlier in the session, but with inflation below the Bank of England’s 2% target – at a better than expected 1.9% in July – fears were lowered of an imminent interest rate hike to 6%.
London’s benchmark index was 9.7 points higher at 6228.7 by mid-morning, overcoming a stumbling start from overnight falls in the United States, caused by another firm with sub-prime mortgage exposure, Aegis Mortgage Corporation, filing for bankruptcy.
The upbeat news on interest rates saw housebuilders Barratt Developments and Persimmon trim losses seen earlier today, with the duo down 3p to 933p and 7p to 1225p respectively.
Retailers were given a lift, with B&Q owner Kingfisher climbing the leaders board after rising 3.75p to 215.25p, while Argos owner Home Retail Group cheered 4.75p to 410p.
Flagship carrier British Airways was the leading Footsie riser, up 9.5p to 410.5p, closely followed by heavily weighted miners including Vedanta Resources, up 38p to 1705p and Anglo American, ahead 53p at 2869p.
Developments in the ABN Amro takeover battle saw Royal Bank of Scotland gain 10.5p to 591.5p – after the consortium led by the bank upped its stake in the Dutch takeover target to 3.25%.
Barclays, which received clearance from Dutch regulators for its own bid last night, was also ahead 3p at 661.5p
The leading Footsie faller was Dairy Milk maker Cadbury Schweppes, down 10p at 565.5p after a downgrade from Credit Suisse due to the prospects of a lower selling price for its US drinks business because of credit market volatility.
Meanwhile supermarket group Morrisons, was down more than 1%, or 3.75p, to 262.25p after halting cold meat sales at two stores in Scotland following a health scare.
