View the article online at http://citywire.co.uk/money/article/a528493
Miners hold FTSE back as Europe basks in relief rally
Britain’s FTSE 100 only added 20 points as weak mining stocks hurt the index. Elsewhere markets rallied as Germany approved an expansion of the European bailout fund.
Britain’s FTSE 100 was held back by failing mining stocks as European markets soared following Germany’s passing of the eurozone fund.
The UK index of blue-chip shares lost 0.4%, or 20 points, to 5,197, and the Mid-250 index shed 0.53%, or 53 points, to 9,985.
A vote to expand the eurozone fund, European Financial Stability Fund (EFSF), to €440 billion was passed unanimously by the German parliament, signalling the country’s support to strengthen the bailout package.
Positive US employment data also buoyed confidence in markets on Wall Street. Official government data showed that GDP growth for the second quarter was 0.1% ahead of expectations at 1.3% and applications for unemployment insurance have fallen to a five-month low.
Michael Hewson, analyst at CMC Markets, said: ‘While the main markets in Europe have responded somewhat more positively to the Bundestag vote, and the positive US data, the FTSE has lagged behind, held back by soft mining stocks as we head into the end of the week and the quarter.’
However, the vote in Germany bore no resemblance to reports at the weekend that the EFSF would be increased to €2 trillion.
Hewson commented: ‘That won’t happen. The Germans will be very reluctant to increase the EFSF to that amount as it would put their banks' AAA ratings at risk.’
The Dow Jones Industrial Average rose 1.6% to 11,186, the Standard & Poor's 500 index gained 0.68% to 1,158, and the Nasdaq Composite index added 0.17% to 2,496.
On currency markets sterling gained 0.69% against the dollar to $1.56, and the dollar added 0.83% against the euro to $1.36. Gold fell to $1,619 an ounce from a daily high of $1,633 while Brent crude for delivery in next month gained 0.94% to $104.75 per barrel.
Other stock markets in Europe also made gains: Germany’s DAX index added 1.1% to 5,639, France's CAC 40 index took on 1.07% to 3,027, and the FTSEurofirst 300 index of top European shares rose 0.56% to 932.5.
In the UK hedge fund manager Man Group (EMG.L) fell a further 3.9p, or 2.17%, to 176p, after yesterday's 20% slide prompted by news of investors withdrawing their money during the summer.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
- Rio Tinto PLC
- Antofagasta PLC
- Vedanta Resources PLC
- Man Group plc
- RM PLC
- Smiths Group PLC
- Tate and Lyle PLC
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.