FTSE rises on hope of stimulus and jumps in bank and energy stocks
STRENGTH in risk-sensitive energy and financial stocks hauled Britain’s leading share index higher yesterday, as investors continued to focus on hopes for fresh stimulus measures from central banks to spur global growth.
These hopes were balanced by second-quarter GDP data from France and Germany which came in above forecasts, easing concerns about the Eurozone’s two biggest economies, although the region as a whole contracted over the period, maintaining support for the case for European Central Bank action.
The FTSE 100 index closed 32.90 points higher, or up 0.6 per cent at 5,864.78, having shed 0.4 per cent in the previous two sessions.
Integrated oils provided the biggest lift for the blue chips, helped by a firmer crude price on hopes for an improvement in demand from fresh stimulus measures.
Banks and insurers also saw good support, with Standard Life the stand-out blue chip gainer, up 8.1 per cent after posting above-forecast first-half results.
UK water stocks were in demand as takeover speculation swirled around the sector, with United Utilities a top FTSE 100 gainer, up 4.9 per cent after reports suggested it could become the target of an offer worth 900p per share, compared with a 689p closing price on Monday.
Peers Severn Trent, ahead 3.4 per cent, and Pennon Group, up 4.2 per cent, were higher in sympathy.
Volume for the FTSE 100 was modest, at less than 65 per cent of the 90-day average as the summer lull continued.