Skip to main contentSkip to navigationSkip to navigation

Fed's hint over interest rates spurs FTSE 100

This article is more than 17 years old

London's leading shares closed deep in positive territory yesterday, spurred higher by a buoyant Wall Street, following positive comments from Federal Reserve chairman Ben Bernanke.

Mr Bernanke's testimony to the Senate banking committee included a passage about inflation cooling off as the year progressed. That was taken by the market to mean that the Fed's campaign of interest-rate rises is at an end. The Dow Jones index was up almost 150 points by the close of trading in London.

Coupled with the minutes of the last meeting of the Bank of England's monetary policy committee - which showed that all seven members of the committee supported the recent decision to leave rates on hold - Mr Bernanke's comments helped the FTSE 100 close up 96.3 points at 5778.

Just three of the top 100 stocks posted declines by the close of trading in London, while the FTSE 250 was up a mammoth 215.6 points at 9184.4. Xstrata closed up 94p at £20.05 after raising its bid for Canadian rival Falconbridge, while Tate & Lyle rose 18p to 647p after chairman Sir David Lees told shareholders at the company's annual meeting that first-quarter results were "well ahead" of last year.

Corus added 15.75p to 418.75p as vague talk concerning the steel maker getting a bid approach did the rounds again. Another perennial bid target, Centrica, added 5.25p to 282.25p as JP Morgan upped its recommendation on the stock.

The world's largest interbank broker, ICAP, rose 19.75p to 479.75p after chief executive Michael Spencer told the company's annual meeting that it would meet the Square Mile's forecasts for its annual results after a strong first quarter. The City is forecasting profits of about £256m for the year to end March 2007. "ICAP has benefited from the recent market turbulence ... emerging markets and foreign exchange benefited from very volatile conditions and equity derivatives were especially active."

BT added 4.75p to 231.5p as analysts realised that Ofcom's decision to abandon the controls placed on the prices BT is able to charge consumers, will give it more competitive freedom.

BSkyB added 13.5p to 531p as analysts pored over this week's broadband announcement. In a note, Credit Suisse described the company's push into residential broadband as "bigger, bolder ... but more costly". The broker, which has a neutral stance on the stock, added that the move is largely a defensive one, pointing out that the market seemed to be assuming "static competition and technology evolution".

The dangers inherent in that assumption are obvious, given yesterday's announcement from the Carphone Warehouse. Having lost the right to tag its broadband service "free forever" the company has gone back on the attack, dropping the price of the service by £1, to £19.99. Its shares bounced back 19.75p to 283.25p.

The online gaming sector was particularly active yesterday following the shutdown of BetonSports' website after FBI agents arrested the company's British chief executive, David Carruthers, in Texas, and indicted four companies and 11 individuals.

In early trading the sector received a big boost when a gaming industry website reported that BetonSports had reached a deal with the US justice department which could pave the way to it reopening for business. That report, however, was denied by company insiders and shares across the sector sank again. But the overall bullish trend within the FTSE index was enough to push PartyGaming higher. Its shares closed at the top of the FTSE 100 leaderboard, up 9p at 94.25p.

The three FTSE 100 losers were BP, down 3.5p at 631p, Scottish & Southern Energy, down 3p at £11.63, and BOC Group, down 1p at £15.99. Among the second-liners, the plant hire specialist Ashtead added 8.5p to 155.75p after it snapped up US rival NationsRent in a deal worth $1bn (£540m). It is paying $600m in cash and assuming $400m in debt. To fund the deal Ashtead is launching a rights issue on the basis of three shares for eight existing shares, priced at 100p each to raise £150m.

LogicaCMG rose 7.25p to 167.5p. On Tuesday, rival IT consultancy Atos Origin announced a drop in first-half sales and warned it would miss current sales forecasts for the whole year because of delays to new business in the UK. That sparked concerns that LogicaCMG's trading update would be similarly downbeat. In fact, the company said yesterday that trading in the first half was well ahead of last year and the integration of its recently acquired French business, Unilog, was on track.

Shares in Russian state oil company Rosneft failed to sparkle on their London debut. Listing at $7.55 they closed at $7.54. Lambert Howarth dropped 14.25p to 83p as the largest supplier of shoes to Marks & Spencer warned that it would report a loss for this year after significantly lower sales in the first six months. Blacks Leisure, down 60p at 490p, was also sent reeling by a warning on profits.

On AIM it was the first day of dealings for shares in the stockbroker Arden Partners - which raised £3m in a placing at 162p a share, valuing the business at £40m. The stock closed at 172.5p.

We'll get ahead

Shares in Lo-Q received a bit of Southern Lovin' yesterday as the creator of "queue-jumping" technology announced its deal with Dollywood. For the uninitiated - Dollywood, in Tennessee, is a magnet for all fans of the singer Dolly Parton and it gets more than 2.25m visitors a year.

Among the reasons to visit the US theme park are rides and attractions including Dolly's Demolition Derby and the intriguing Beaver Creek, as well as several live shows with a Southern flavour. The thought is that visitors might be impatient in their queues so Lo-Q developed a virtual queuing system allowing higher-paying visitors to go first. It will run a trial of the system, already used in other theme parks, at Dollywood later this year. Lo-Q added 2.5p to 14.75p.

Most viewed

Most viewed