LONDON (ShareCast) - - US data comes in better-than-expected.
- EC cuts GDP estimates across the board.
- RBS, Capita lead risers after full-year results.

London’s blue chip index finished strongly on Thursday, gaining nearly 40 points in the final two hours, after some better-than-expected economic data Stateside boosted buying late on. Meanwhile, the market reaction to a flurry of company results on the Footsie was mixed with Capita and Royal Bank of Scotland (RBS) rising strongly and RSA Insurance leading the fallers, while Bodycote surged on the FTSE 250.

The US Labor Department revealed in the afternoon that initial jobless claims were unchanged last week at 351,000, better than the 353,000 forecast by economists surveyed by MarketWatch, while the four-week moving average fell by 7,000 to 359,000, the best level since March 2008. Meanwhile, the Federal Housing Finance Agency said that its home price index rose by a better-than-expected 0.7% in December.

Earlier on, the European Commission (EC) unveiled some gloomy forecasts for economic growth across Europe, saying that the European Union (EU) is set to experience stagnating growth this year, and the euro area will undergo a mild recession. The EC said that the “unexpected stalling of the recovery in late 2011 is set to extend into the first two quarters of 2012”, with the EU registering zero growth this year and the Eurozone registering a 0.3% contraction. However, the EU Commissioner for Economic and Monetary Affairs, Olli Rehn, did note that there are signs of a recovery and modest growth is predicted to return in the second half of this year.

In other news, Germany’s IFO business climate indicator for February came in at a six-month high of 109.6 points, up from 108.3 in the previous month, according to the German IFO Institute based in Munich. The market consensus was looking for a reading of 108.8. It is the fourth consecutive monthly increase.

RBS, CAPITA TOP THE CHARTS AFTER RESULTS

The biggest news of the day centred around RBS which rose strongly early on despite widening losses in 2011. Provisions for mis-selling of payment protection insurance schemes and Greek debt ensured part-nationalised lender made a pre-tax loss of £766m in 2011, compared with a loss of £399m in 2010, though the core business was profitable at the operating level. Results were broadly in line with expectations, according to Nomura.

"RBS Core profits - the ongoing bank - were £6bn, comparing well with others and representing a return on equity of 10.5%. The reduction in our balance sheet since 2008 now exceeds £700bn with all other 'safety' measures improving strongly," said Group Chief Executive Stephen Hester. Sector peers Barclays and Lloyds were also in demand, with the latter's results due out tomorrow.

Capita was the second-best performer by midday after the outsourcing giant said that it expects revenue growth to accelerate in 2012 after a "reasonable" level of growth last year. Turnover grew by 7% from £2,744m to £2,930m in the year ended December 31st, slightly ahead of Panmure Gordon's forecast of £2,900m.

Leading the downside was RSA Insurance after its full-year results disappointed. Profit before tax came in at £613m, a gain of 29% on the previous year, 8% below consensus estimates according to Nomura. Net asset value came in 3% below forecasts also. The broker highlighted that RSA's 2012 guidance now implies that around a 15% reduction to consensus pre-tax profit forecasts now needs to be made.

British American Tobacco (BATS) fell despite seeing revenues rise 3% to £15,399m in 2011. The company said that volumes fell 0.4% during the year, and expressed concerns about various proposals around the world to introduce so called “plain packaging”, which BATS argues will play into the hands of criminal gangs which smuggle cigarettes.

Gas and electricity provider Centrica rose after aying that it had put in a resilient performance in challenging conditions in 2011. Revenue edged up to £22.8bn from £22.4bn in 2010, ahead of market expectations of £21.9bn.

BODYCOTE SURGES OVER 15% ON FTSE 250

Shares in metals and alloys treatment firm Bodycote rocketed after it said profit jumped 68% helped by strong demand at its aerospace and defence unit and robust sales overseas. The group said despite economic headwinds, particularly in Europe, the business would continue to make progress in the coming year.

Cookson, the materials science firm, rose after selling its American precious metals business to Richline, an offshoot of Warren Buffetts’s Berkshire Hathaway vehicle.

Meanwhile, sitting in the bottom spot was construction, services and property group Kier, which this morning unveiled a 4.6% fall in total revenue for the six months ended December 31st.

Following suit was bus and train operator Go-Ahead which posted a 13% drop in half year pre-tax profit and expressed its caution n regards to the wider economic outlook.

BC

FTSE 100 - Risers
Fresnillo (FRES) 1,885.00p +6.08%
Royal Bank of Scotland Group (RBS) 28.72p +5.09%
Capita (CPI) 718.00p +4.28%
Vedanta Resources (VED) 1,435.00p +3.99%
Ashmore Group (ASHM) 401.20p +3.80%
Randgold Resources Ltd. (RRS) 7,500.00p +3.52%
Lloyds Banking Group (LLOY) 36.58p +3.26%
Serco Group (SRP) 556.00p +3.15%
Aggreko (AGK) 2,205.00p +2.18%
Old Mutual (OML) 160.10p +2.10%

FTSE 100 - Fallers
RSA Insurance Group (RSA) 107.00p -4.89%
Morrison (Wm) Supermarkets (MRW) 286.50p -2.98%
Essar Energy (ESSR) 121.60p -2.88%
Amec (AMEC) 1,088.00p -2.42%
Man Group (EMG) 129.00p -2.05%
Sainsbury (J) (SBRY) 298.90p -1.97%
BAE Systems (BA.) 319.20p -1.75%
International Consolidated Airlines Group SA (IAG) 162.60p -1.57%
Hargreaves Lansdown (HL.) 457.80p -1.55%
ITV (ITV) 77.80p -1.33%

FTSE 250 - Risers
Bodycote (BOY) 389.30p +15.52%
Filtrona PLC (FLTR) 442.80p +6.96%
Senior (SNR) 198.50p +5.42%
Cookson Group (CKSN) 670.00p +4.69%
Grainger (GRI) 108.80p +4.62%
Anglo Pacific Group (APF) 328.80p +4.38%
Informa (INF) 435.30p +4.36%
Gem Diamonds Ltd. (DI) (GEMD) 254.20p +4.35%
Kentz Corporation Ltd. (KENZ) 486.00p +4.20%
Lamprell (LAM) 347.60p +4.01%

FTSE 250 - Fallers
Kier Group (KIE) 1,334.00p -10.41%
Kesa Electricals (KESA) 76.50p -5.15%
Logica (LOG) 82.50p -4.79%
Ophir Energy (OPHR) 375.00p -4.34%
Go-Ahead Group (GOG) 1,274.00p -3.99%
Cranswick (CWK) 812.00p -3.16%
Supergroup (SGP) 562.00p -3.10%
Domino's Pizza UK & IRL (DOM) 447.00p -2.83%
Mitchells & Butlers (MAB) 265.00p -2.57%
FirstGroup (FGP) 295.50p -2.54%

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