London Report: Shares lifted by Putin’s speech despite tension
THE UK’S top share index rose yesterday as stock markets rebounded after a speech by Russian President Vladimir Putin on Ukraine, which some traders interpreted as being less aggressive in tone than had been expected.
The blue-chip FTSE 100 index closed up 0.6 per cent, or 36.93 points, at 6,605.28 points – marking only the second time in the last eight sessions that it has ended in positive territory.
Defence and aerospace company BAE Systems was the best-performing FTSE stock in percentage terms, rising 2.9 per cent after investment bank RBC raised its rating on the stock to “outperform” from “sector perform”.
Cruise ship operator Carnival also climbed 2.2 per cent to 2,433p after UBS raised its price target on the shares to 2,600p from 2,500p.
The FTSE had been in negative territory but then rallied after Putin said Russia did not want to seize more of Ukraine after approving plans to make Crimea part of Russia.
Putin also said that while Russia would look to defend its own interests, Russia would never seek to start a confrontation with Western powers.
“It’s not quite as aggressive as some people had thought,” said Mark Ward, head of execution trading at Sanlam Securities.
In spite of the FTSE’s rebound, the index remains below its 2014 peak of 6,867.42 points in late January, with global stock markets having lost ground on the back of the tensions in Crimea and concerns about a possible economic slowdown in China.
The FTSE rose 14.4 per cent in 2013 to post its best annual gain since 2009.
Many traders expect the index to hit a record high of 7,000 points later in 2014 as Britain’s economic recovery slowly gathers momentum, but the FTSE has failed to break above the 6,900 point level so far this year and is down by two per cent since the start of 2014.
Some other technical traders saw support for the FTSE from the fact that the index’s rebound had pushed it above its 200-day simple moving average – often used by such traders as a sign that a market’s decline has run its course.
Adrian Slack, technical strategist at London-based firm APS Alpha, said that if the FTSE could hold above that 200-day average – which lies around 6,580 points – it could then push on to reach 6,750 points.
“I fancy the FTSE to push higher as long as it can hold above that 200-day moving average,” he said.