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FTSE edges higher but weekly loss looms
by Chris Marshall on Aug 23, 2013 at 10:05
Britain’s FTSE 100 was heading for a third straight week of declines, even as some better economic data helped the benchmark index towards a second day of gains on Friday.
Thursday’s PMI numbers, showing better than expected growth in the eurozone and China, allayed fears about the state of the world economy and allowed investors to temporarily put aside their concerns about the end of US stimulus.
Even emerging markets seemed to take a breather after the hard selling of recent days, with the MSCI gauge of emerging market shares rising after six down days. Brazil became the latest country to take action to stem a decline in its currency, launching a $60 billion currency swap programme to prop up the sinking real.
The FTSE 100 rose 0.3% to 6,465, but remains down around 0.9% so far this week.
Market watchers expressed scepticism that the improved morale would continue. 'With the Fed's tapering timetable still so uncertain its unlikely that this marks a significant turnaround in sentiment, instead more of a relief rally while traders wait for clarity,' said Jonathan Sudaria of Capital Spreads.
Croda International (CRDA.L) led London shares higher, benefiting from an upgrade to ‘buy’ from Deutsche Bank. The shares rose 3.6% to £26.61.
The pound edged higher after the Office for National Statistics revised up its estimate of second-quarter UK GDP growth to 0.7% from a first reading of 0.6%. Sterling was up 0.2% at $1.5621.
‘The details show a very encouraging picture of broad-based upturn across almost all sectors of the economy,’ said Markit economist Chris Williamson.
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