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FTSE shrugs off stalling US growth to hit two-month high

FTSE shrugs off stalling US growth to hit two-month high

Strong results from BSkyB (BSY.L) and Lloyds Banking Group (LLOY.L) helped to lift the FTSE 100 to a two-month high, as the UK blue-chip index followed overseas markets in shrugging off disappointing US growth figures.

The FTSE 100 rose 23 points, or 0.3%, to 6,803, as it followed US markets in placing more weight on upbeat comments from the Federal Reserve on the strength of the US recovery than figures showing growth of just 0.1% in the first quarter of the year.

Announcing a further $10 billion (£5.9 billion) reduction in the amount of money it creates each month in order to stimulate the US economy the Fed said it believed 'growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions'. The 0.1% annualised growth figure relates to January, February and March, when severe weather hampered exports and hit investment spending.

'The US looks to have shrugged off its winter cold and has set its sights on the sun and fresh pastures, consequently recording highs,' said Jonathan Sudaria, dealer at Capital Spreads.

Lloyds was the biggest riser, adding 3.3p, or 4.4%, to 78.7p as the bank announced a 22% jump in profits in the first quarter of the year alongside falling costs and improving margins. It said it would apply to the Bank of England to restart dividend payments in the second half of the year.

BSkyB rose 33.5p, or 3.8%, to 913.7p as the broadcaster doubled net new TV customers in the third quarter year-on-year. 'BSkyB has reported Q3 results which demonstrate further robust operational progress, particularly in connected [to the internet] TV services,' said Paul Richards, analyst at Numis. 'Encouragingly, nearly half of TV customers are now connected and On Demand usage (which we view as a key driver of customer satisfaction and therefore churn reduction) has tripled over the year.'

Schroders (SDR.L) jumped 79p, or 3.1%, to £26.35, as the fund manager reported net inflows of £3.8 billion in the first three months of the year, bringing total assets up to £268 billion. 

BG Group (BG.L) continued its rise on hopes the oil and gas group could be snapped up by BHP Billiton (BLT), jumping 30p, or 2.5%, to £12.28.

Sainsbury (SBRY.L) dropped 8.1p, or 2.4%, to 327.2p as the supermarket group unveiled a revamp of its management team ahead of the departure of chief executive Justin King.

Weir Group (WEIR.L) fell 87p, or 3.2%, to £26.03 after a downturn in the group's minerals business marred an otherwise solid set of first quarter results from the valve and pump manufacturer.

Serco Group (SRP) slid 11.5p or 3.4% to 328.6p after the outsourcer, caught up in a scandal over the tagging of prisoners last year, warned investors it needed to raise more money as it cut profit forecasts again.

Among smaller companies, Salamander Energy (SMDR.L) surged 9% to 146.5p after the Asia oil and gas company announced it was in talks over a potential sale.

Carclo (C1Y.L), tumbled 26% to 133.6p after revealing slower-than-expected growth in the touch sensors it manufactures.       

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Profile: The opportunity set that attracted Brett Williams to wealth management

Profile: The opportunity set that attracted Brett Williams to wealth management

Brett Williams is best known for helping to build some of the biggest platforms in the IFA market.He made the move over to wealth management to head SEI’s UK business earlier this year in the belief that this is where the best opportunities now lie.

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