💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

FTSE up; commods boosted by stimulus hopes, data

Published 10/06/2010, 12:10 PM
Updated 10/06/2010, 12:12 PM
GC
-
HG
-

* FTSE 100 index adds 0.8 percent; fresh 5-month peak

* Miners, energy issues boosted by hopes of fresh stimulus

* Autonomy plunges after cutting full-year guidance

By Jon Hopkins

LONDON, Oct 6 (Reuters) - Britain's top share index closed higher, at a fresh five month peak on Wednesday, led by miners and energy issues as commodities rose on optimism governments will act to stimulate economies around the world.

At the close, the FTSE 100 was up 45.63 points, or 0.8 percent at 5,681.39, its highest close since April 26.

"It's a reaction to recent supportive comments and actions from the central banks ... showing they are prepared to use every weapon in the arsenal to make sure the fragile recovery won't turn into a double dip, and that has helped risk appetite," said Henk Potts, markets strategist at Barclays Wealth.

Miners gave the biggest boost to the index as gold hit a record high and copper rose to its highest since July 2008 on a strong demand outlook and expectations that governments will do more to stimulate the global economy.

Anglo American, Lonmin, Kazakhmys, and Xstrata added 3.8 to 4.2 percent, helped by a Morgan Stanley note increasing price targets across the sector.

Oil majors gained as crude hit its highest level in five months, with Royal Dutch Shell up 1.7 percent.

"There is a generally positive feel to the market but obviously there is still some nervousness ahead of the all-important non-farm payrolls on Friday," Potts said.

U.S. blue chips were up 0.2 percent by London's close, although an unexpectedly poor reading on private-sector hiring provided some caution ahead of September's jobs report.

Private employers cut 39,000 jobs in September, according to the ADP Employer Services report, the largest monthly loss since January and a disappointment to analysts who had forecast 24,000 private payroll additions.

Meanwhile, on the domestic macro front, a survey by the British Retail Consortium showed that a jump in the cost of agricultural commodities drove British shop price inflation to a five-month high in September.

BA SOARS

British Airways was a big blue chip riser, up 4.5 percent, adding to sharp gains in the previous session when it reported strong September passenger numbers, helped by a Barclays Capital target price hike.

Mid-cap peer EasyJet was the top FTSE 250 gainer, jumping 12 percent after the budget airline said it expected to beat its profit expectations for the year following a strong performance over the summer.

Autonomy was the top blue chip faller, shedding 16 percent after the software firm said in a trading update it would cut its full-year revenue guidance by about 3 percent after weaker than expected demand.

In reaction, Goldman Sachs removed Autonomy from its "Conviction Buy" list, and Panmure Gordon downgraded its rating to "hold" as estimates and targets were chopped.

Other technology issues suffered in sympathy, with Sage Group down 1.3 percent.

Food retailer Sainsbury was also a blue chip faller, down 0.6 percent, as an above-forecast second-quarter trading update prompted some profit-taking. Charles Stanley cut its rating for Sainsbury to "neutral" on valuation grounds.

And fellow retailer Marks & Spencer shed 0.4 percent ahead of a trading update due on Thursday.

(Editing by Sharon Lindores)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.