UK stocks hit a one-month high on Friday on hopes of a near-term continuation of US stimulus, while data from China showed a pick-up in growth.
The FTSE 100 broke through the 6,600 level today to finish at 6,622.58, up 46.42 points on the day. The last time the index closed higher was on September 19th when it finished at 6,625.39.
Senior Market Analyst Michael Hewson from CMC Markets said that markets were given "further impetus into the end of the week, as investors celebrate the fact that the uncertainty of the last three weeks coming from the US has finally been concluded in the short term".
Also helping gains was a strong start on Wall Street after a string of well-received earnings from some heavyweight blue chips, such as Google, Morgan Stanley and General Electric. This helped push the S&P 500
extend gains after hitting a record high last night.
Back in London, the FTSE 100 managed to close 2.1% higher on the week as investors showed optimism that the Federal Reserve could delay tapering stimulus given that the government shutdown is likely to have dampened growth in the fourth quarter. Markets are now looking ahead to the delayed release of the September US employment report next Tuesday, which will be key factor in the Fed's next move.
Analysts at Capital Economics said they still expect that the Fed will begin to taper its asset purchases before the end of this year, "but we wouldn't rule out a longer delay, possibly even until mid-2014".
Chinese gross domestic product grew at a year-on-year rate of 7.8% in the third quarter, rebounding after the 7.5% growth seen in the second quarter. This was in line with consensus estimates, though a slowdown in growth of industrial production, retail sales and fixed asset investment in September could mean that there will be some weakness in upcoming quarters, analysts warned.
FTSE 100: Prudential rises on AIA readacross
Life insurance and giant Prudential was a high riser on Friday after Asian peer AIA reported record quarterly results with new business up 26%. "The insurance sector was also helped by reports that an EU capital requirement could be eased compared to the initial version sought by regulators," said Financial Sales Trader Max Cohen from Spreadex.
easyJet continued its recent strong performance. The stock has risen by 7% in the last three days along and now stands 78% higher than it did at the start of the year. Nomura kept its 'buy' rating for the shares
today on the back an "ongoing return improvement story".
Heading the other way was William Hill after JPMorgan Cazenove downgraded the stock from 'overweight' to 'underweight', saying that the bookmaker will face challenges after its profit warning in the third quarter.
Diversified mining group Anglo American was lower after reporting a 24% fall in iron-ore production in the third quarter and an 8% decline in manganese, which together account for one half of group profits. Goldman Sachs was also weighing on the share price after cutting its target for iron ore.
RBS was being weighed down by comments from Investec which recommended investors not to own the stock ahead of its third-quarter results on November 1st. Meanwhile, banking peer Barclays was also in the red on reports that it is facing new allegations about LIBOR-rigging
FTSE 100 - Risers
Prudential (PRU) 1,264.00p +4.12%
Fresnillo (FRES) 988.50p +3.78%
Reckitt Benckiser Group (RB.) 4,502.00p +3.35%
Experian (EXPN) 1,200.00p +3.09%
Rexam (REX) 492.30p +2.56%
easyJet (EZJ) 1,360.00p +2.41%
Travis Perkins (TPK) 1,791.00p +2.40%
IMI (IMI) 1,537.00p +2.40%
Associated British Foods (ABF) 2,062.00p +2.38%
Whitbread (WTB) 3,351.00p +2.35%
FTSE 100 - Fallers
William Hill (WMH) 403.50p -3.19%
Anglo American (AAL) 1,532.00p -1.35%
British Sky Broadcasting Group (BSY) 928.00p -1.28%
Royal Bank of Scotland Group (RBS) 372.70p -1.11%
Vodafone Group (VOD) 227.70p -0.70%
CRH (CRH) 1,531.00p -0.52%
Rolls-Royce Holdings (RR.) 1,092.00p -0.46%
Centrica (CNA) 362.70p -0.44%
Lloyds Banking Group (LLOY) 76.50p -0.38%
Sainsbury (J) (SBRY) 395.00p -0.38%
FTSE 250 - Risers
Hunting (HTG) 872.50p +7.65%
Centamin (DI) (CEY) 51.20p +6.67%
Regus (RGU) 212.50p +6.14%
Alent (ALNT) 355.50p +5.46%
Polymetal International (POLY) 601.00p +5.44%
Fidessa Group (FDSA) 1,999.00p +5.32%
Hochschild Mining (HOC) 166.00p +5.13%
Elementis (ELM) 247.30p +4.92%
Electrocomponents (ECM) 289.70p +4.02%
Diploma (DPLM) 688.00p +3.93%
FTSE 250 - Fallers
Computacenter (CCC) 543.00p -4.49%
Provident Financial (PFG) 1,576.00p -2.72%
Menzies(John) (MNZS) 807.00p -2.18%
Daejan Holdings (DJAN) 3,931.00p -2.07%
UDG Healthcare Public Limited Company (UDG) 318.00p -1.97%
Kentz Corporation Ltd. (KENZ) 526.50p -1.96%
Kazakhmys (KAZ) 255.10p -1.81%
Cairn Energy (CNE) 285.30p -1.42%
EnQuest (ENQ) 130.00p -1.37%
IP Group (IPO) 137.30p -1.22%