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Ashmore remains on sick bed as FTSE recovers

by Chris Marshall on Jan 14, 2014 at 17:50

Ashmore remains on sick bed as FTSE recovers

Britain’s FTSE 100, alongside other European markets, recovered from this morning’s declines amid some upbeat economic data and as Wall Street opened higher.

Having followed Asian and US markets lower, a better than expected update on Eurozone industrial production – which rose 1.8% in December – and a decline in UK inflation back to the Bank of England’s 2% target helped European shares recover.

Added to that, a report showed US retail sales advanced more than forecast in December. Investors are now watching earnings figures from major US banks for direction.

Of London stocks, Ashmore remained down 12% (see morning report below) with other fund management firms following the emerging markets specialist lower.

The FTSE 100 closed up 0.1% at 6,766.

The British pound rose 0.4% to $1.6449 as the decline in inflation raised hopes that the Bank of England would have more leeway to keep rates at rock bottom for longer.

Global stocks fall as Ashmore leads FTSE retreat (09:58am)

A simmering New Year caution over high stock prices turned into a full-blown market rout overnight, with the largest fall in US stocks since November being followed by steep losses in Asia and Europe.

The S&P 500’s 1.3% decline was followed by a 3% slide for Japan’s Nikkei  225, as investors questioned valuations and steeled themselves for the next cut to US stimulus.

Europe was faring only slightly better, with Britain’s FTSE 100 – which hasn’t rallied quite as hard as other developed market indices over the past year – dropping just 0.5%. Not even a decline in the UK inflation rate to 2%, the lowest in four years and hitting the Bank of England's target, could provide relief for gloomy investors.

The declines on Wall Street come as Federal Reserve officials suggested that the central bank’s gradual reduction of its stimulus scheme will continue despite Friday’s mixed US jobs report. Atlanta Fed president Dennis Lockhart said he supports ‘similar tapering steps’ as December’s $10 billion reduction in QE announced by the Federal Reserve last month

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