London close: Fed cut helps Footsie bounce back
Footsie surged into the positive territory, retracing some of the losses incurred yesterday, as an emergency rate cut in the US gave financials a boost while miners traversed earlier losses.
The Federal Reserve chopped its benchmark rate to 3.5% in an effort to stave off a recession and following a slump in global stockmarkets just a week before a scheduled policy meeting.
Banks Royal Bank of Scotland Group and Lloyds TSB Group were already higher after the banking sector was upgraded by Morgan Stanley but the news from the US gave the stocks a further boost.
Miners had littered the fallers amid continued concerns about lower demand for metals. But after the rate cut Vedanta, Anglo American and Rio Tinto lurched back into the blue on hopes that it would stimulate growth.
Vale, the Brazilian miner, confirmed it is talking to its bankers about funding a takeover of Xstrata despite that could be worth more than $90bn (£46bn). The Latin American metals group said yesterday that discussions with Xstrata had not produced agreement on a deal.
Fund manager Schroders topped the risers list. It has been hard hit recently with its big US presence through a combination of a weak dollar and recession concerns.
Housebuilder Taylor Wimpey was another strong performer, while real estate companies Hammerson and Liberty International also advanced. The sector has been buoyed recently by news that some investors believe it is time to start buying the stocks again.
Oil stocks such as BP and Shell also rose despite a fall in crude prices.
There were only a handful of fallers with tobacco stocks Imperial Tobacco and British American Tobacco down, while BT was also a major loser. Defensive utility stocks also suffered.
FT publisher Pearson was up after saying it expects to post adjusted full-year earnings at or above the top end of the range of current market expectations.
Supermarket group Wm Morrison topped forecasts with a 9.5% rise in like-for-like sales excluding fuel in the 6 weeks to 6 January. Morrison added it is confident full-year profit would be at the top end of its expectations. Total sales increased by 11.6% (13.6% including fuel).
Rolls-Royce's contract with Taiwan's China Airlines could be worth $1.3bn.
It also announced that Spanish airline Air Europa and Latin American carrier LAN Airlines have selected its Trent 1000 engines. The value of the business is around $560m at list prices.
Life groups perked on reports that two of China's largest groups are considering buying stakes in UK companies. Ping An is considering Aviva and Prudential, according to one report, while China Life is also said to be looking at possible UK investments.
Southern Cross fell on the departure of finance director Graham Sizer. He will be replaced by company insider Jason Lock.
Consultancy group Management Consulting expects full-year underlying pre-tax profit to rise to between £22.5m and £23m compared to £16.1m last year. The group said it is confident it will make further progress during 2008 and beyond.
Online fashion retailer EBTM said delays in appointing licensees for its Atticus brand and a cautious outlook for its wholesale business could result in full year figures falling "materially" short of expectations. The group said it is adopting a cautious outlook for the wholesale division in 2008.
X5 Retail Group has reported a 57% surge in fourth quarter sales to $1.69bn, although Russia's largest food retailer in terms of revenue cautioned that growth is set to slow in 2008.
Biopharmaceutical firm Protherics said AstraZeneca has treated the first patient in its phase 2 programme of CytoFabTM in severe sepsis.
FTSE 100 - Risers
Schroders Nv (SDRC) 924.00p +10.39%
Wolseley (WOS) 757.00p +9.79%
Schroders (SDR) 1,022.00p +9.54%
TUI Travel (TT.) 225.75p +9.45%
Kingfisher (KGF) 141.90p +9.41%
Lloyds TSB Group (LLOY) 408.00p +9.24%
Home Retail Group (HOME) 298.25p +9.05%
Liberty International (LII) 1,047.00p +8.95%
Royal Bank of Scotland Group (RBS) 373.25p +8.90%
InterContinental Hotels Group (IHG) 699.00p +8.54%
FTSE 100 - Fallers
Imperial Tobacco Group (IMT) 2,300.00p -4.09%
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BT Group (BT.A) 252.50p -1.94%
British American Tobacco (BATS) 1,802.00p -1.64%
National Grid (NG.) 781.00p -1.64%
United Utilities (UU.) 691.00p -1.43%
Scottish & Newcastle (SCTN) 746.00p -1.32%
Severn Trent (SVT) 1,428.00p -1.04%
AstraZeneca (AZN) 2,201.00p -0.77%
Resolution (RSL) 712.00p 0.00%
International Power (IPR) 395.50p +0.13%
FTSE 250 - Risers
Daejan Holdings (DJAN) 3,615.00p +16.61%
Cattles (CTT) 277.00p +16.26%
Signet Group (SIG) 72.25p +14.68%
Severfield-Rowen (SFR) 412.00p +12.41%
Inchcape (INCH) 368.00p +12.11%
Quintain Estates & Development (QED) 486.00p +11.53%
Millennium & Copthorne Hotels (MLC) 345.50p +11.27%
SIG (SHI) 828.00p +11.07%
Tomkins (TOMK) 171.00p +11.04%
Babcock International Group (BAB) 540.00p +10.83%
FTSE 250 - Fallers
Close Brothers Group (CBG) 750.00p -19.09%
Ferrexpo (FXPO) 212.00p -10.55%
Aricom (ORE) 62.00p -7.12%
eaga (EAGA) 125.00p -5.30%
International Personal Finance (IPF) 179.00p -5.29%
Aquarius Platinum (AQP) 504.00p -5.17%
Northern Rock (NRK) 90.00p -4.51%
Regus Group (RGU) 65.00p -4.41%
Hikma Pharmaceuticals (HIK) 475.00p -4.19%
Southern Cross Healthcare Group (SCHE) 410.75p -3.92%
