Rate-cut hopes keep Foot­sie ris­ing

Daily Express - - CITY&BUSINESS -

SHARES en­joyed their third suc­ces­sive daily rise af­ter ag­gres­sive rate cuts in the U.S. raised ex­pec­ta­tions of sim­i­lar moves on this side of the At­lantic.

The FTSE 100 in­dex rose 49.1 points to 4291.6 on ex­pec­ta­tions that the Bank of Eng­land would next week lower the cost of bor­row­ing af­ter the Fed­eral Re­serve trimmed its rate from 1.5 per cent to 1 per cent on Wed­nes­day.

Hopes that con­certed action by cen­tral banks and gov­ern­ments would drag the world econ­omy back from a sav­age re­ces­sion lifted global mar­kets.

In­surer Old Mu­tual led the Foot­sie’s charge, gain­ing 9bp to 60p on talk that it could bol­ster its fi­nan­cial po­si­tion with a rights is­sue, al­low­ing it to cut debts.

The in­sur­ance sec­tor was also lifted by fig­ures from Stan­dard Life, the lat­est in a string of in­sur­ers to re­port ro­bust fig­ures, al­lay­ing fears of a melt­down in the sec­tor.

Nor­wich Union owner Aviva gained 26p to 350p and Pru­den­tial rose 12bp to 307dp, but RSA In­sur­ance fell 3bp to 130p af­ter an­a­lysts at Royal Bank of Scot­land cut their rec­om­menda­toin on the in­surer from hold to sell.

There was a lot of switch­ing be­tween stocks in the sec­tor and Ad­mi­ral ended the day as the big­gest blue-chip faller, down 190p to 900p.

A big rise in prof­its at Royal Dutch Shell over­shad­owed a drop in the price of oil be­low $65 a bar­rel on wor­ries about the U.S. econ­omy.

Tullow Oil rose 9fp to 473p, Cairn En­ergy was up 204p to 1550p and BG up 63p to 866p, though BP slipped 11bp to 494dp. Hopes that the in­ter­na­tional econ­omy would ben­e­fit from rate cuts lifted the min­ing sec­tor.

It was also helped by a bet­ter-than-ex­pected pro­duc­tion re­port from Kaza­khmys, up 32fp to 301bp.

Other min­ers were pulled up in its wake, in­clud­ing Rio Tinto, up 89p to 2766p, BHP Bil­li­ton, 48p ahead at 1008p, Antofa­gasta, up 29fp to 367bp and Xs­trata up 73p to 960p.

Punch Tav­erns was 17fp brighter at 147p af­ter an up­beat note from Mor­gan Stan­ley.

En­ter­prise Inns gained 1bp to 96fp and Whit­bread 16p to 868p.

Re­cruit­ment firm Hays gained 7fp to 70p af­ter an up­grade from Mer­rill Lynch.

Hopes that the strike at Boe­ing could be com­ing to an end lifted aero­space en­gi­neer Se­nior 3fp to 49dp and spe­cial­ist tool maker Hamp­son In­dus­tries, up 7p to 108bp. Hamp­son also rose on news of a new con­tract to sup­ply equip­ment used for the Air­bus A350 pro­gramme.

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