The FTSE 100 rose 56.5 points (1.1pct) to 5,317 by early afternoon with financial services company Hargreaves Lansdown (LON:HL., up 5pct at 464.6p) leading the charge.
Contrary to speculation, Moody’s made no change to its stands on Italy. However, fellow rating agency Standard & Poor’s today announced a shock decision to downgrade the third largest euro zone economy from A-plus to A with a negative outlook.
Among other things such as weak government, S&P noted the eroding confidence in Europe’s ability to control its fiscal problems, which has driven up borrowing costs for debt ridden euro zone members such as Italy to record levels, making it difficult to raise cash and service their debts.
Following early weakness, UK stocks rebounded in late morning with traders eyeing the meeting of the Federal Open Market Committee in the US in hopes the Fed will agree on further stimulus measures to shore up the economy.
“(Fed chairman) Ben Bernanke rarely disappoints the market and tends to be very reactive to developments in the world’s economy...Bernanke and the Fed can ill afford to disappoint investors with Wednesday FOMC decision, which has the potential to send markets tumbling if they fail to provide the support and monetary policy direction investors want to see,” said chief market strategist at City Index Joshua Raymond.
Retailers did well this morning, buoyed by a positive update from FTSE 250 peer Debenhams (LON:DEB), whose like for like sales rose 1.2 percent in the 52 weeks to 3 September. The company said it was confident the business “can continue to make progress over the coming year”.
Home improvement retailer Kingfisher (LON:KGF, up 2.5pct at 259p) and fashion house Burberry (LON:BRBY, up 3.7pct at 1,503p) both made the FTSE 100 leaderboard.
Wall Street preview september 20 2011
US stocks moved in the same direction as European equities this morning with the Dow Jones Industrial Average (DJIA) advancing 47 points (0.4 percent) and the broader S&P 500 index rising 5 points (0.45 percent).
Gains in US markets were curbed by disappointing housing data for August, which was seen as the latest sign that the economic recovery in the US is quickly running out of steam.
The Commerce Department said housing starts dipped 5 percent compared to July to an annualised rate of 571,000, while analysts polled by Bloomberg projected a drop to 590,000.
With no other updates on today’s macroeconomic calendars, traders in the US will be firmly focused in the FOMC meeting.
UK corporate news september 20 2011
Other updates in the FTSE 100 including Vodafone Group's (LON:VOD, up 1pct at 162.9p) announcement of a strategic partnership with the Conexus Mobile Alliance to expand its partner market presence in Asia.
The mobile operator said it intends to work with as many Conexus members as possible, complementing its own regional operations in India, Australia, Fiji and New Zealand and its existing partners in Malaysia (Celcom) and Sri Lanka (Dialog).
Vodafone Global Enterprise, which manages the communications needs of multinational companies, already has 140 customers which are headquartered in Asia Pacific and a further 435 customers which operate in the region.
In other blue chip news, Rio Tinto (LON:RIO, down 0.5pct at 3,494.5p) has increased its copper mineral resource by 20 million tonnes to 106 million tonnes at its wholly-owned Kennecott Utah Copper Bingham Canyon Mine.
The mineral resource addition, known as the North Rim Skarn, increases contained metal in mineral resources by 0.73 million tonnes copper, 1 million ounces (Moz) of gold and 13 Moz of silver over the 2010 year-end mineral resource estimate.
In the FTSE 250, betting firm William Hill (LON:WMH, up 0.5pct at 228.5p) confirmed that it is in takeover discussions with Probability (LON:PBTY), saying if it does make an offer for the AIM quoted online gaming company, it will be in cash.
“However, William Hill reserves the right to reconsider and, if appropriate, amend this position as discussions progress,” said William Hill.
Fellow midcap, healthcare company BTG (LON:BTG, up 0.5pct at 268.2p), announced that the US Food and Drug Administration (FDA) has accepted for review the biologics license application (BLA) file for glucarpidase and has granted a priority review.
The FDA has also determined that glucarpidase is exempt from pediatric assessments as it has orphan drug designation. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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