- Fed tapers by $10bn a month
- Yellen says rates to stay low
- UK retail sales, US jobless claims on tap
- Rolls-Royce unveils £1bn buyback
techMARK 2,823.77 +0.67%
FTSE 100 6,827.27 +0.72%
FTSE 250 15,752.09 +0.82%
UK stocks rose strongly on Thursday, helped by some decent gains from Rolls-Royce and BT Group, as investors reacted positively to comments from the Federal Reserve which pushed US markets to all-time highs the day before.
The FTSE 100 opened 0.7% higher at 6,827 in early trading, rising for the third straight day after hitting a seven-week low of 6,754.64 on Monday.
The Federal Reserve tapered stimulus by a further $10bn a month on Wednesday, as expected, explaining that economic activity is "rebounding" amid an improvement in the jobs market.
Nevertheless, Fed Chair Janet Yellen sounded a dovish tone by saying that stimulus is still needed given that the "underutilisation in the labour market remains significant".
She also said that while officials' projections for rate rises have increased, rates will continue to stay low for a "considerable time" after bond buying ends.
Analysts at Rabobank said this morning: "The Fed managed to navigate through what some had expected to be a potentially tricky announcement by providing further fuel for both equity and Treasury market bulls - quite an achievement given both are already at levels that leave skeptics perplexed; the S&P closed at a new record high, while Treasury yields were lower."
Today is set to be a relatively quiet day in terms of economic data with UK retail sales and US jobless claims the only major indicators scheduled. UK retail sales are expected to have fallen by 0.5% in May, compared with a 1.3% gain in April. Meanwhile, US jobless claims are predicted to have edged lower to 314,000 last week, from 317,000 the week before.
Jet engine maker Rolls-Royce jumped after pledging to buy back £1bn of shares
if it succeeds in selling its energy gas turbine and compressor business to Germany's Siemens. The company also outlined plans to reduce capital spending in the next five years.
British telecoms group BT was also higher as investors shrugged off new rules from regulator Ofcom to ensure competition in the super-fast broadband market. Ofcom is proposing new obligations forcing BT to maintain a sufficient margin between its wholesale and retail super-fast broadband charges to allow other operators profitably to match its prices.
Housing and construction stocks were putting in a decent performance this morning as share prices
continued to recover after a sell-off last week that was spurred by concerns about a sooner-than-expected rise in interest rates in the UK. Barratt Developments, Ashtead, CRH, Travis Perkins and Taylor Wimpey were all in positive territory.
Natural gas producer BG Group was among the handful of stocks to trade in the red after being downgraded by Credit Suisse to 'underperform'.
Software group Micro Focus rose after saying it enjoyed a solid year of progress, with growth picking up in the second half. Annual profit fell 2.4% on a reported basis but were 0.8% higher at constant currency.
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 1,071.00p +6.04%
CRH (CRH) 1,651.00p +2.48%
Ashtead Group (AHT) 849.50p +2.35%
Barratt Developments (BDEV) 353.40p +2.32%
BT Group (BT.A) 393.80p +2.29%
Aberdeen Asset Management (ADN) 444.40p +2.25%
Coca-Cola HBC AG (CDI) (CCH) 1,398.00p +2.12%
BHP Billiton (BLT) 1,911.00p +1.95%
Travis Perkins (TPK) 1,611.00p +1.90%
Antofagasta (ANTO) 771.50p +1.85%
FTSE 100 - Fallers
Shire Plc (SHP) 3,758.00p -0.71%
Vodafone Group (VOD) 197.05p -0.53%
BG Group (BG.) 1,263.00p -0.32%
Standard Chartered (STAN) 1,279.50p -0.27%
Admiral Group (ADM) 1,550.00p -0.19%
Diageo (DGE) 1,856.00p -0.11%
FTSE 250 - Risers
Xaar (XAR) 528.00p +5.60%
Micro Focus International (MCRO) 871.50p +4.43%
Ocado Group (OCDO) 372.30p +3.91%
Man Group (EMG) 102.80p +3.68%
Go-Ahead Group (GOG) 2,257.00p +3.67%
Supergroup (SGP) 897.00p +3.10%
Berkeley Group Holdings (The) (BKG) 2,307.00p +3.08%
Rotork (ROR) 2,709.00p +3.04%
Henderson Group (HGG) 243.10p +2.88%
Thomas Cook Group (TCG) 139.70p +2.87%
FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,126.00p -1.83%
Rank Group (RNK) 165.30p -1.61%
Fidessa Group (FDSA) 2,368.00p -1.58%
COLT Group SA (COLT) 142.30p -1.11%
PayPoint (PAY) 1,111.00p -0.80%
De La Rue (DLAR) 839.00p -0.71%
Brown (N.) Group (BWNG) 420.80p -0.64%
Alent (ALNT) 346.80p -0.63%
RPC Group (RPC) 643.00p -0.62%
Keller Group (KLR) 955.00p -0.62%