View the article online at http://citywire.co.uk/money/article/a574249
FTSE rises on Greece deal and bright US figures
Britain’s FTSE 100 strengthens as Greece secures the next part of its bailout and positive US retail sales buoy investor sentiment.
Britain’s FTSE 100 rose as European leaders agreed to the next step of Greece’s bailout and strong US retail figures lifted the mood.
The benchmark UK index of blue-chip shares took on 1.07%, or 63 points, to 5,956 and the Mid-250 index rose 1.61%, or 186 points, to 11,750.
Finance group Prudential (PRU.L) soared 35.5p, or 4.8%, to £7.63 top the FTSE 100 index as operating profits rose 7% to over £2 billion in 2011, with strong earnings from its Asia division. See the FTSE’s performance and the index’s bigger gainers and losers.
US volatility index dips to near 2007 lows
In the US a raft of economic data boosted markets, as retail sales increased at their fastest rate in five months, up from 0.6% to 1.1% in February.
The VIX, which measures the expectation of market volatility in the S&P 500 in the coming month, also dropped to a near June 2007 low at 13.99.
However, the retreat in the index, also known as the fear gauge, hasn’t been viewed by all as a positive move. Bill Hubard, chief economist at Markets.com, commented the move reflected more a withdrawal of speculators from the market rather than a real improvement in investor sentiment.
Hubard said: ‘The VIX index is going to continue to be dull, boring and have a tendency to decline because the real money players don’t know what to do here and when they don’t know what to they say "thank you very much we will not play".’
Nevertheless the S&P 500 hit intra-day highs not seen since 2008. The Dow Jones Industrial Average gained 0.93% to 13,080, the Standard & Poor's 500 index increased 0.98% to 1,385, and the Nasdaq Composite index took on 1.11% to 3,017.
Later today the US Federal Reserve will meet and is expected to show no sign of relenting on its monetary policy, leaving the door open to further quantitative easing.
In Europe finance ministers agreed to the next pay-out for Greece’s rescue package. Germany’s ZEW survey also lifted the mood in Europe as the figures beat expectations, with a strong improvement in economic sentiment, with a 22.3 reading for March.
European markets were also in a positive mood: Germany’s DAX index rose 1.37% to 6,996, France's CAC 40 index gained 1.72% to 3,550, and the FTSEurofirst 300 index of top European shares added 1.69% to 1,095.
Sterling took on 0.6% against the dollar to $1.5727, and added 0.87% against the euro to €1.1994.
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