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FTSE gains ahead of Fed meeting; Standard Life rises
Britain’s FTSE 100 and other leading indices in Europe advance ahead of a key policy decision by the US Federal Reserve.
Britain’s FTSE 100 and other leading indices in Europe advanced on Tuesday, led higher by financial stocks, ahead of a key policy decision by the US Federal Reserve.
The UK index of blue-chip shares rose 0.47%, or 28 points, to 5,920 – extending its recent rally into a fifth day – and the All Share index climbed 0.45%, or 14 points, to 3,072. See the FTSE’s performance and the index’s top winners and losers.
The Fed is expected to keep interest rates at record lows and point to a slightly brighter economic outlook, but refrain from ruling out additional stimulus measures.
The meeting by the Federal Open Markets Committee comes after data showed on Friday that US employers added more than 200,000 workers for a third consecutive month in February.
‘Even the dovish members of the committee should be appeased by the recent data and stay in their cage,’ said Philip Marey, strategist at Rabobank. But he added that the Dutch bank still expected the Fed to ease monetary policy at some point soon in the face of an uneven recovery.
‘The doves will come out of their cage as soon as the recovery is disappointing once again and inflation has fallen further. In fact, they are already thinking about a new approach of monetary easing,’ Marey said.
Other stock markets in Europe also climbed: Germany’s DAX index added 0.74% to 6,952, France's CAC 40 index hardened 0.74% to 3,516, and the FTSEurofirst 300 index of top European shares took on 0.7% to 1,085.
Standard Life results
Standard Life (SL.L) topped the leader board on the FTSE 100, climbing 8p to 245p, after the insurer posted a forecast-beating 28% jump in 2011 profit, driven by a strong performance at its Canadian unit and cost cutting.
‘The shares will likely react positively to these results,’ said analysts at Oriel Securities in a research note.
But referring to embedded value, a measure of worth for insurers, they continued: ‘We continue to see a fairly weak investment case, with limited growth in EV and a book of new business that we feel is yet to prove it can be as profitable as expected.’
Meanwhile, sterling edged up 0.07% against the dollar to $1.564 and 0.14% versus the euro to €1.19 as traders awaited the Fed meeting, and ahead of data on US retail sales and German economic sentiment.
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by Dumb Investor on Jun 18, 2013 at 13:30