Market rallies as case for taper fades
Wednesday 23 OctOber 2013 The FTSe 100 rallied to an 11-week high yesterday amid robust updates from some of Britain’s biggest firms and data from the US supporting the case for easy monetary policy.
BHP Billiton, Reckitt Benckiser and Whitbread were among the stock-market titans posting numbers, while the US published belated employment figures showing that 148,000 jobs were created in September.
Due to the figure not being as good as expected, traders felt that it strengthened the case for further money printing without being too detrimental to the economic outlook.
Brenda Kellyat IG said: “News that US unemployment had failed to meet estimates was like the cherry on top for additional equity upside.”
The FTSe 100
index
briefly tested highs above 6,700, before closing at 6,695.66, up 41.46 points on the day.
Reckitt was the biggest riser, up more than 5 per cent on the back of strong third-quarter revenue growth. The shares climbed 234p to 4,734p on the potential £2.5 billion sale of its pharmaceuticals division.
Also on the top-flight risers’ board was mining giant BhP Billiton after it lifted its target for iron ore production in the current financial year. Shares were 77p higher at 1,950.5p.
But Whitbread shares dipped despite results from the owner of the Costa coffee chain and Premier Inn budget hotel business being slightly ahead of expectations. The shares have risen by a third over the year to date and some chose to cash in. The shares were off 13p at 3,359p.
It was a similar story for chip maker Arm Holdings, which was down more than 3 per cent at 1,004p despite a 27 per cent rise in third-quarter revenues.
Wall Street night, pushing the
climbed
last Standard & Poor’s 500 Index to yet another record high, after weaker-than-expected US job creation last month reinforced expectations the Federal Reserve will hold the course on its economic stimulus into next year.
The Dow Jones industrial average was up 75.78 points, or 0.49 per cent, to end at 15,467.98 while the broader S&P 500 closed up 10.05 points, or 0.58 per cent, at 1,754.71. The Nasdaq Composite Index finished up 9.52 points, or 0.24 per cent, at 3,929.57. The firm said it would close a chain factory in Stockport as part of a turnaround plan. UbM The media services firm guided revenue growth expectations lower.