FTSE 100 close: Eurozone boost for shares

 

The London market set a new high for the year today after GDP figures for Germany and France showed them emerging from recession and signalling an end to the world slump.

London Stock exchange

The Footsie rallied 39.9 points to 4,756.7 on the news that both economies grew by 0.3% on the second quarter, as opposed to the 0.3% contraction economist had been expecting.

The US Federal Reserve last night said there were signs that economic activity was levelling out and that conditions in financial markets had improved.

Miners were buoyed by the encouraging economic signals as Xstrata lifted 5% or 45.5p to 810p and Kazakhmys cheered 46.5p to 900.5p.

Other sectors to receive a shot in the arm included housebuilding after FTSE 250 index firm Barratt Developments rose 8.2p at 228.6p and Taylor Wimpey climbed 1.75p at 40.29p, a rise of nearly 5%.

Prudential was the top flight's biggest riser, up 10% or 51.2p to 529.5p, after the insurer posted better-than-expected half-year profits and bucked the trend in the sector by improving its dividend for shareholders by 5%.

Holidays company Thomas Cook was the leading blue-chip faller after bookings for the winter season got off to a slow start and the company formally dropped its target for operating profits of £480m by 2010. Shares slumped 5% or 11.0p to 219p.

Having made similar cautious comments in a trading update yesterday, rival TUI Travel avoided another sell-off today to climb 1.8p to 246.6p.

Car parts maker Tomkins gained 7% or 12.8p to 190.1p after it slumped to a first half loss but announced plans to step up cost cutting efforts. Fellow engineering firm GKN lifted 5.5p to 115.1p.

Guinness firm Diageo shed 9.5p to 926.5p after Budweiser and Beck's brewer Anheuser-Busch InBev announced a 1.1% drop in revenues for the second quarter of the year, despite a resurgence for Stella Artois in the UK. Profits still rose 13% in the quarter.

Tomorrow's Agenda

The Council of Mortgage Lenders publishes its repossessions and arrears figures tomorrow. During the first three months of the year, the number of people evicted from their homes surged 50% to 12,800.

But the Council recently cut its estimate for the number of homeowners facing repossession this year from 75,000 to 65,000 - still the highest number since 1992. Analysts said that the pain will be milder than initially feared.

Abercrombie & Fitch, the US fashion retailer, posts second-quarter results. The chain has been hard hit by the recession, reporting a 28% slump in same-store sales when it last reported to the market.

The Ministry of Justice publishes bankruptcy petitions and winding-up statistics for the second quarter. Personal bankruptcy filings jumped by 29% in the first three months of the year as unemployment rose and house prices fell.

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