FTSE close: Miners gain; Sage & Pru up

By Ed Monk for Thisismoney.co.uk
Updated: 12:42 EDT, 1 December 2010

17.00 (close)

Looking up: Will shares finally rally?

Banks and mining stocks drove a much-needed rally for the London market today after strong data from China and the United States boosted sentiment.

The FTSE 100 Index, which slipped to its lowest level in two months on Tuesday, gained 2% or 114.2 points to 5642.5 amid a Europe-wide rally.

Spirits were also brighter on Wall Street, with the Dow Jones Industrial Average 1.7% higher by the time of London's close, after figures showed US manufacturing orders increased in November and private businesses added 93,000 jobs in November, against expectations for a 70,000 gain.

The report followed better-than-expected manufacturing figures from China, which showed the country's resource-hungry boom picked up pace in November.

The upbeat session provided some welcome breathing space for investors after recent eurozone debt concerns caused Government bond yields to rise sharply in countries such as Spain, Italy and Portugal.

Those fears were eased today following a better-than-expected bond auction by Portugal and as its government reiterated that it will not follow Greece and Ireland and require a European Union-led bail-out.

The euro has taken a battering, sinking below 1.30 dollars to its lowest level in 11 weeks, but was up against all major currencies in trading today. The pound was flat against the dollar at around 1.55.

Mining and banking stocks recovered losses in recent days and filled the risers board, with Royal Bank of Scotland up more than 6% or 2.3p at 39.9p, while Lloyds was not far behind, lifting more than 6% or 3.6p to 64p.

China's strong growth figures proved good timing for Prudential bosses as they met investors in London to outline their plans for Asia, including a target to double the value of last year's operating profits by 2013.

Prudential shares jumped on the forecast, up nearly 5% or 31p to 599p, as chief executive Tidjane Thiam said the company aspired to be "one of the winners in the post-financial crisis world".

Other risers included accountancy software firm Sage after it reported a bigger than expected 14% rise in annual profits and a return to sales growth over the second half of the year.

The revenues momentum, fuelled by greater confidence among small and medium sized enterprise customers, meant shares rose 5% or 13.47p to 271p.

The increased appetite for riskier assets ensured stocks that have sheltered investors in recent weeks fell back, with Severn Trent down 36p to 1410p, National Grid off 15.5p to 552.5p and United Utilities 7p lower at 589.5p.

In other results, Thomas Cook dropped 4%, off 8.3p to 178p, in the wake of a 6% fall in full-year profits as growth in central Europe and Germany only partly offset a weaker performance in the company's UK business.

The biggest FTSE 100 Index risers were Royal Bank of Scotland up 2.3p at 39.9p, Lloyds Banking Group ahead 3.6p at 64p, Xstrata up 75p at 1367p and Prudential ahead 31p at 599p.

The biggest fallers were National Grid down 15.5p at 552.5p, Severn Trent off 36p at 1410p, United Utilities down 7p at 589.5p and Capita off 6.5p at 645.5p.

16.00: Strong economic data from China and the US along with debt reassurances from Europe saw the FTSE 100 surge 117 points to 5,645.6.

Wall Street's Dow Jones lifted 1.3% after a key survey in the US revealed private businesses added 93,000 jobs in November, against expectations of a 70,000 gain.

The upbeat report added to better-than-expected manufacturing figures from China, which showed the country's resource-hungry boom picked pace in November.

The top flight has faltered alongside other markets in recent sessions amid growing debt concerns in the eurozone. Government bond yields have risen sharply in countries such as Spain, Italy and Portugal - an indication of declining confidence in public finances.

But fears were eased today when the Portuguese government reiterated that it will not follow in the footsteps of Greece and most recently Ireland and require a European Union-led bail-out.

The increased appetite for riskier assets meant those stocks that have sheltered investors in recent weeks fell back, with Severn Trent down 38p to 1,408p, National Grid off 16.5p to 551.5p and United Utilities 7p lower at 589.5p.

14.30:

The fabulous Footsie is now 110.06 points higher at 5638.33!

But that still means blue chips are 60 odd points down on the week.

Out at the top of the leaderboard is Royal Bank of Scotland. The bank is 2.27p - or 6% - up on the day at 39.86p, which just about pulls back the losses from the first part of the week.

For a period today the top riser was IT company Sage. Today it reported a 14% rise in annual profits after seeing a return to sales growth over the second half of the year. We've got more here.

12.00:

A noon update - the FTSE 100 is 87.4 points better off at 5615.65.

We've got more on two of the big movers today. Prudential has underlined its potential in Asia by revealing a target to double new business profits from the region by 2013. Pru shares are 33.5p better at 601.5p. Read more.

Meanwhile, Thomas Cook is 4.9p lower at 181.4p after it revealed plans to cut more than 500 UK jobs after weak summer trading and the volcanic ash cloud disruption hit full-year profits. Here's more on that.

And Sage shares are up 13.5p (5.25%) to 270.8p on the news the software company enjoyed a 14% profits rise for the year. It sees an uplift in fortunes for SMEs as markets look to be improving for them.

10.40:

The FTSE 100 is a healthy 62.07 points to the good at 5590.34.

Int he bind markets, eyes are closely trained on eurozone bond yields for signs of which economies, if any, are headed for debt meltdown.

So far today, things look calm for most of the at-risk countries. Yields on the government debt from Spain, Portugal, Greece, Belgium and Italy have all ticked lower.

That means the interest in the debt is lower, which means the markets are ever-so-slightly less concerned about lending to them than they were first thing this morning.

The exception is Ireland, were the yield on 10-year bonds moved up from 9.18% to 9.27%.

09.45:

The FTSE 100 has rallied today with Chinese data pushing miners higher and the Prudential and Sage jumping on positive profit news.

Investors were offered some relief from eurozone debt fears today after stronger than expected Chinese manufacturing figures lifted sentiment.

The latest report, which showed that the country's factory output boom picked up pace in November, ensured a strong session for miners and meant London's FTSE 100 Index recovered from recent losses to stand 54.6 points higher at 5582.9.

Xstrata, 46.5p or 3.6% up at 1,338.5p, Fresnillo, 46p up at 1,457p, Kazakhmys, 38p up at 1,424p, and Eurasian Natural Resources, 24p better off at 902.5p, all made hay.

China's strong growth figures also proved good timing for Prudential bosses as they met investors in London to outline their plans for Asia, including a target to double the value of last year's operating profits during 2013.

Prudential shares jumped on the forecast, up 4% or 23p to 591p, as chief executive Tidjane Thiam said the company aspired to be 'one of the winners in the post-financial crisis world'.

Other risers included accountancy software firm Sage after it reported a 14% rise in annual profits and a return to sales growth over the second half of the year. Shares rose 9.1p to 266.4p.

In other results, Thomas Cook dropped 4% in the wake of a 6% drop in full-year profits as growth in central Europe and Germany only partly offset a weaker performance in the company's UK business.

The tour operator plans to generate up to £50m of savings by reducing the number of managerial and support staff in the UK, as well as renegotiating supplier costs and upgrading IT.

On Wall Street later today, the futures markets predict a higher opening for the Dow Jones.

In currency, the pound at 9am was at $1.5585 compared to $1.5570 at the previous close. Against the euro the pound was at €1.1923 compared to €1.1953 at the previous close.

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