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Draghi drags FTSE higher with stimulus remarks

Draghi drags FTSE higher with stimulus remarks

The FTSE 100 has risen as investors anticipated further stimulus action from the European Central Bank (ECB) after a dovish speech from president Mario Draghi.

Draghi told a global central banking conference on Friday he was prepared to respond with 'all the available instruments needed' should inflation remain defiantly low. The ECB in June cut interest rates and launched a €400 (£318) billion lending package to stimulate the eurozone economy, but has so far shied away from a money-printing quantitative easing programme.

Speaking on Friday, Draghi acknowledged the eurozone's economy remained 'uniformly weak' and that while he was confident June's measures would bear fruit, 'we stand ready to adjust our policy stance further'.

'The [ECB's] governing council will... within its mandate use all the available instruments needed to ensure price stability over the medium term,' he said.

The FTSE 100 added 25 points, or 0.4%, to 6,800, playing catch-up with European markets, which rose on Monday. US markets also rose on Draghi's comments, with the S&P 500 briefly breaching the 2,000 mark for the first time.

RSA Insurance (RSA) topped the FTSE 100 leaderboard, rising 2.5% to 447.9p after analysts at Bank of America Merrill Lynch upgraded the stock to 'buy' from 'neutral'.

WPP (WPP) jumped 1.6% to £12.47 after the advertising group announced first-half results slightly ahead of forecasts.

Bunzl (BNZL) meanwhile rose 0.9% to £16.45 as the business supplies distributor also beat investor expectations with a strong first half of the year, and announced the acquisition of four businesses.

Antofagasta (ANTO) was the biggest faller, dropping 3.3% to 780.6p after announcing a 11.5% fall in profits in the first half of the year due to higher production costs and lower copper prices. Petrofac (PFC) fell 2.7% to £10.96 after its first half profits nearly halved.  

'Mid cap' stock Regus (RGU) tumbled 6.9% to 182.9p after the office provider said it expected to open at least 450 business centres this year, as investors worried about the impact on short-term profits.

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