Euro high hopes gives FTSE 100 a lift
Hopes for a turnaround in Europe’s economic fortunes cheered investors today as the FTSE 100 Index rallied to within 100 points of its record level.
The trigger for the improvement came from Germany after it emerged that the country grew by a much better than expected 0.7% in the final three months of last year, leading to growth of 1.6% across 2014.
The FTSE 100 Index was 35.2 points higher at 6863.1, with markets in Paris and Frankfurt also ahead by more than 0.5%.
Some tentative signs of willingness to compromise in the Greek debt crisis also offered hope to investors and enabled the price of a barrel of Brent crude to climb back towards the 60 US dollars mark.
The euro was slightly stronger against the US dollar but failed to make headway against the pound after the Bank of England yesterday appeared to bring forward the likely timing of an interest rate hike.
Sterling was flat against the euro at just below 1.35 and slightly higher against the US dollar at 1.54.
Oil stocks dominated the FTSE 100 risers board with Tullow Oil up 4% or 16.7p to 401.85p and BP 5.8p higher at 450.1p.
GlaxoSmithKline was another strong riser after UBS ditched its sell rating on the pharmaceuticals stock and recommended that clients now buy the shares. The stock jumped by 4% or 62.25p to 1547.75p.
Rolls-Royce shares were under pressure after it announced a further downgrade to profits guidance for this year.
Announcing annual results, the FTSE 100 company said 2015 will be tougher than expected as the recent slide in oil prices has resulted in “increasing uncertainty” for many of its customers, particularly in the marine sector.
Rolls also reported a 6% drop in underlying revenues to £14.6 billion for 2014 and said underlying profits were 8% lower at £1.62 billion. Shares fell by as much as 2% at one stage before settling 6.75p lower at 898.25p.
Other stocks on the back foot included BT after US-owned rival Virgin Media vowed to spend £3 billion on expanding its fibre-optic broadband network over the next five years.
BT shares have been at a 14-year high in recent days but fell back 2% or 10.15p to 439.85p. Sky was 6.5p lower at 921p.
Elsewhere in the telecoms sector, TalkTalk shares dipped 3p to 320.65p in the FTSE 250 Index after its shares were cut to underperform by broker Jefferies.
