FTSE gains on upbeat US consumer morale data

Britain’s FTSE 100 rebounded higher on the back of upbeat US consumer confidence data, even as it headed for its lowest weekly close since January, as Wall Street shrugged off a surprise $1.24 billion trading loss by JP Morgan.

Heading towards the close, the UK index of blue-chip shares gained 0.66%, or 36 points, to 5,580 and the All Share index added 0.62%, or 18 points, to 2,899. See the FTSE’s performance and the index’s top winners and losers.

JPM slumps

The closely watched Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 77.8 in May, its highest in four years, from 76.4 in the previous month, a report showed earlier in the day. The average forecast in a Reuters poll of economists called for a decline to 76.2.

A drop in petrol prices was likely the key driver of the rise in morale, according to Amna Asaf at Capital Economics.

But she warned that if equity prices continue their downward trend, any further fall in gasoline prices may not be enough to hold up consumer confidence for much longer. ‘Overall, encouraging, but we suspect that the final reading of confidence, which will be more affected by the most recent slump in stock markets, could be notably weaker than this,’ Asaf added.

US stocks welcomed the data, although financials weighed after JP Morgan revealed the huge loss on credit derivatives trading. The Dow Jones Industrial Average hardened 0.39% to 12,905, the Standard & Poor's 500 index climbed 0.25% to 1,361, and the Nasdaq Composite index gained 0.73% to 2,955.

JP Morgan shares slumped 8.2% to $37.40 in early trading, while rivals Morgan Stanley and Citigroup lost 4.5% to $14.9 and 3.3% to $29.64 respectively.

Fitch warns eurozone on Greek exit

Marks & Spencer (MKS.L) topped the leader board on the FTSE 100, adding 12% to 360p, after Bank of America Merrill Lynch upgraded its recommendation for the retailer to ‘buy’ from ‘neutral’.

Resources stocks were among the biggest losers on the index, as commodity prices continued to weaken. Eurasian Natural Resources Corp (ENRC.L) lost 20.5p to 516.5p and Evraz (EVRE.L) gave up 12p to 335p.

Most stock markets elsewhere in Europe improved, despite persisting worries over Europe’s debt woes. Germany’s DAX index added 0.8% to 6,570, France's CAC 40 index edged up 0.04% to 3,131, and the FTSEurofirst 300 index of top European shares was 0.33% higher at 1,022.

But Greece’s benchmark stock index slumped 4.52% to a 20-year low of 612. Fitch earlier warned the entire eurozone that should the debt-laden state leave the monetary union as a result of its budget crisis, the remaining countries could find their sovereign ratings at risk.

Sterling weakened 0.23% versus the dollar to $1.609 and 0.28% against the euro to €1.244.