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FTSE 100 at nine-month high on Fed hopes

by Caelainn Barr on Dec 12, 2012 at 17:15

FTSE 100 at nine-month high on Fed hopes

17.15 (Update): British stock markets edged closer to the 6,000 barrier on hopes the US Federal Reserve will announce further quantitative easing (QE) or money printing later today.

Central bank officials are expected to extend ‘Operation Twist’ following a two-day policy meeting. The programme operates by buying long-term bonds in exchange for short-dated bonds, and is due to expire at the end of this year. However an extension to the programme would provide more support for the recovery of the US economy. 

This prompted the benchmark UK index of blue-chip shares to add 21 points or 0.35% to 5,945, a nine-month high. The Mid-250 index gained 0.28%, or 34 points, to 12,224.

Evraz (EVRE.L) took on 11p, or 4.5%, to £263p, sprinting to the top of the FTSE 100, following reports in the Russian media that the government is ready to allow the mining group to develop coal deposits along with Chinese state companies, China Coal and Shenhua.

International Personal Finance (IPF.L) gained 7p, or 1.9%, to 375p as analysts at Canaccord Genuity raised the target price on the consumer credit company that to 350p, with a ‘hold’ rating.

FTSE firm as unemployment falls and Anglo American finds favour

10.30: Britain’s markets moved higher as new figures showed unemployment fell in November, raising hopes an improving labour market in the UK will support the economic recovery.

Unemployment fell by 3,000 last month and the number of new claimants in October was revised down from 10,000 to 6,000. The brighter figures beat analyst expectations of a forecast 7,000 rise in November.

The FTSE 100 gained 0.22%, or 13 points, to 5,938 and the FTSE 250 rose 0.14%, or 17 points, to 12,208.

On currency markets the pound strengthened following the better-than-expected jobs data, rising 0.08% against the dollar to a five-week high of $1.6134.

Anglo American (AAL.L) jumped 35.5p, or 1.9%, to £18.68, to the top of the FTSE 100 index as analysts at Barclays increased their rating on the stock from ‘underweight’ to ‘equal weight’. They pointed to the potential of Anglo spinning off its platinum miner, Amplats, which could address the stock’s discount.

IPhone chip designer Imagination Technologies (IMG.L) shed 19.7p, or 4.4%, to 428p as it was pipped to the post by rival Ceva, which offered $90 million (£56 million) for micro-processor business MIPS. However Imagination Technologies, a Citywire Top Stock, also reported a 10% rise in first-half profits as it shipped 237 million chips in the past six months, ahead of analysts’ expectations.

BG Group (BG.L) shed 1.5p, or 0.14%, to £10.66 after requesting a permit to explore for oil and gas off the Caribbean coast of Honduras.

Tullow Oil (TLW.L) fell to the bottom of the FTSE 100, down 40p, or 3.5%, to £11.12, as analysts cut their target prices on the stock. UBS cut its target price from £14.00 to £12.50; Deutsche Bank reduced its target price from £11.80 to £11.55; analysts at WH Ireland reduced their target price from £15.952 to £15.15; and Liberum Capital downgraded its target price from £18.00, to £17.60.

Building merchants Travis Perkins (TPK.L) shed 6p, or 0.5%, to £10.87 as it reported a 1.8% fall in year to date like-for-like sales as trading conditions remain difficult.

Carillion (CLLN.L) added 8.6p, or 2.9%, to 304p as its forecast year-end pipeline of projects will be bigger than expected, at £35 billion. It also acquired a 49% interest in Bouchier Group for £23.75 million.

Fashion brand SuperGroup (SGP.L) slid 46.5p, or 7.8%, to 550p as it reported a 13% increase in first half earnings. However profits-before-tax slumped 31.5% as operating profits were impacted by foreign exchange contracts relating to the acquisition of SuperGroup Europe.

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