Britain’s FTSE 100 made gains on Thursday morning, hovering around the 5,400 mark once again, despite miners weighing the index down as a result of poor commodity prices.
The UK index of blue-chip shares added 0.16%, or eight points, to 5,449, and the Mid-250 index shed 0.55%, or 57 points, to hit 10,376.
Commodities stocks fell on weakening prices as a report from the International Monetary Fund (IMF) cut growth forecasts for Asia in the coming year, implying less demand for metals.
Three-month copper on the London Metal Exchange (LME) fell 1.6% to 7,406.25, reversing yesterday’s gains of 3.2%.
The biggest losses were made by miners Anglo American (AAL.L), which fell 76p, or 3.14% to £23.44; Eurasian (ENRC.L), which was down 90p, or 5.5%, to 666p; and Fresnillo (FRES.L), which lost 10p, or 0.6% to £16.56.
In Europe news that the Commission was outlining a response to the region’s debt crisis with bank recapitalisations boosted markets overnight but raised the issue of increasing Greek 'haircuts' – meaning that holders of bonds from the country won't get the expected returns.
According to Michael Hewson, market analyst at CMC Markets, the plan, ‘appears to have shifted the discussions onto increasing the private sector involvement with respect to Greek haircuts, with talk of 30-50% haircuts as opposed to the 21% agreed on 21 July’.
UK government bonds settled at their worst level for six weeks as the yield on benchmark 10-year gilts rose 10 basis point to 2.65%.
There were few developments overnight in Slovakia, where policymakers have yet to ratify changes to enlarge the European Financial Stability Facility (EFSF), though it is expected that it will be passed by Friday.
Other stock markets in Europe also fared poorly: Germany’s DAX index lost 0.2% to 5,981, France's CAC 40 index dropped 0.03% to 3,228, and the FTSEurofirst 300 index of top European shares fell 0.33% to 973.
US Treasury Federal Open Market Committee (FOMC) minutes revealed that a third round of quantitative easing was discussed at the Treasury but was voted out three to two, opening the door to the introduction of Operation Twist instead.
Overnight on Wall Street the Dow Jones Industrial Average gained 0.9% to close at 11,518.8. The Nasdaq Composite index climbed 0.8% to settle at 2,604.7, the Standard & Poor's 500 index rose 1.0% to end at 1,207.3, and yields on 10-year US Treasury notes dropped to 3.22%.
Markets in Asia gave a strong performance on Thursday on hopes that the Commission had come up with a plan to recapitalise Europe’s banks. Japan's Nikkei 225 index closed 1.0% higher, at 8,830.3; Hong Kong’s Hang Seng index took on 1.5%, to 18,607.6; and the Korean Kospi index added 1.3% to 1,832.4.
On the FTSE 100 index Bristol-based financial services company Hargreaves Landsdown (HRGV.L) rose 6.5p, or 1.35%, to 487p as their business expanded despite tough market conditions. Revenues for the first quarter added 27% to stand at £57.2 million compared with the same period in 2010.
AIM listed oil and gas valve maker Hamworthy (HAMW.L) up 3.6p, or 0.68%, to 538p as their trading update shows a healthy order book of £256 million.
Sterling fell 0.07% against the dollar to $1.57, and gold prices rose to $1,674 an ounce.
Brent crude for delivery in next month added 0.19% to $111.63 per barrel and West Texas Intermediate crude for next month delivery shed 0.76% to $84.92.