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Carney's stimulus aversion helps pound as FTSE stalls
by Chris Marshall on Sep 27, 2013 at 09:08
The pound rose and the FTSE edged lower after Bank of England governor Mark Carney said he saw no need for more stimulus for the UK economy.
While the FTSE was faring particularly badly, down 0.4% to 6,542, global equity markets remained constrained by negotiations over the US debt ceiling. If a deal is not reached by 17 October then the US government will run out of cash.
Doubts over the fate of the US Federal Reserve’s stimulus scheme are also keeping markets in check, yet as the end of the third quarter nears Britain’s flagship index is heading for a 6.5% gain over the period. The US S&P 500 has gained almost as much.
On Friday morning the British pound rose to its highest level in eight months, up 0.27% to $1.6080, after Mark Carney told the Yorkshire Post that he didn’t see a case for further quantitative easing.
Sterling was also under the influence of yet more signs of economic growth, with building society Nationwide reporting that house prices rose for a fifth month in September, up 0.9%.
Carney’s old company, Goldman Sachs, was also moving markets. In London, Travis Perkins (TPK.L) was the top blue chip riser, up 1.6% to £16.76 after the investment bank raised the builders’ merchants shares to ‘buy’ from ‘neutral’.
The top riser on the mid-cap index was also benefiting from the Goldman effect, with recruitment firm Michael Page (MPI.L) up 2.3% to 496p after the bank billed it as a ‘buy’, up from ‘neutral’.
Countrywide (CWD.L) was the biggest faller on the FTSE 250, down 2.7% to 529p. The estate agency yesterday announced it had bought Lambert Smith Hampton (LSH), a residential and commercial property consultancy group, for £34.1 million.
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on Dec 06, 2013 at 14:28