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WEDNESDAY MARKET CLOSE: Footsie inches ahead to new highs

  • by GARETH MACKIE
 

Following a lacklustre session that initially saw shares drift lower as traders paused for breath ahead of the Bank of England’s latest inflation report, the FTSE 100 index ended the day in positive territory, touching a fresh 14-year high.

The top-flight index, which hit its highest closing level since December 1999 on Tuesday, added a further 5.41 points to finish at 6,878.49.

IG market analyst Chris Beauchamp said: “It will hardly have escaped the notice of traders that the Bank of England was cautiously upbeat in its inflation report, even if it still thinks there is slack to be eliminated before a rate increase becomes a realistic prospect.”

Sterling weakened after governor Mark Carney dampened speculation that interest rates will rise later this year. The Bank raised its forecast for GDP next year from 2.7 per cent to 2.9 per cent, but said inflation should remain at or below its 2 per cent target for the next three years.

With attention focused on US drug giant Pfizer’s ongoing efforts to woo AstraZeneca, larger rival GlaxoSmithKline dropped 13.5p to 1,623.5p as it went ex-dividend and Chinese police accused a senior executive of bribery.

On the positive side, Compass gained 15.5p, or 1.6 per cent, to 996p after the caterer said it would return £1 billion to shareholders through a special dividend and raised its interim payout to 8.8 pence per share.

Elsewhere, the owner of Patisserie Valerie made progress after it was priced at the low end of expectations on the first day of dealings on the stock market.

Patisserie Holdings shares were priced at 170p, valuing the cafe chain at £170 million, but sold like hot cakes during conditional trading and ended the session at 195p.

 

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